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Accounting Methods: Technical Overview of Establishing, Implementing, and Changing Methods

Sec. 451 Revenue Recognition, Sec. 461 Taxable Year of Deduction, Sec. 267 Matching Rules, and Special Methods

A live 110-minute CPE video webinar with interactive Q&A

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Monday, June 2, 2025

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, May 9, 2025

or call 1-800-926-7926
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This webinar will review standard accounting methods often elected by businesses. Our panel of knowledgeable CPAs will explain how accounting methods are adopted, discuss avoiding frequently encountered missteps, and provide scenarios where accounting method choices can be used to lower overall tax liability.

Description

The general revenue recognition rules under IRC Section 451(a) require cash-basis taxpayers to recognize revenue when the cash is received and accrual-basis taxpayers to recognize revenue as it is earned. The Tax Cuts and Jobs Act of 2017 (TCJA) added Section 451(b). This section requires taxpayers to recognize income when it is included in an applicable financial statement (AFS). This change aligns with ASC 606 standards and IFRS 15, resulting in many accrual-based taxpayers recognizing income a year earlier than under prior guidelines.

Also added by TCJA, Section 451(b) allows businesses to elect to include certain advance payments in the year following the year of receipt if said income is not included in an AFS in the year of receipt. Companies with long-term contracts need to be aware of this provision and the implications of the book/tax timing differences.

Accounting methods can be intentionally or unintentionally elected. The former could include an election under Section 266 to capitalize interest on unimproved property, allowing the taxpayer to circumvent Section 163(j) thresholds or to benefit from net operating loss carryovers. The latter might include being unaware of the matching rules under Section 267(a)(2), which state that if an amount is not included in a taxpayer's gross income due to their method of accounting, the relative expense is not deductible. Tax professionals and businesses need to understand the impact of accounting methods on taxable income.

Listen as our panel of accounting methods experts explains the nuances of accounting methods so that tax advisers and businesses can mitigate unexpected tax consequences and minimize tax liability. 

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Outline

  1. Technical overview of accounting methods
    1. What is an accounting method?
    2. Section 451 Taxable year of inclusion
    3. Section 461 Taxable year of deduction
    4. Section 267 Matching rules
    5. Section 460 Long-term contracts
    6. Other accounting methods
  2. Procedural considerations of accounting methods
    1. How is a method established?
    2. Adopting a new method
    3. Other considerations
  3. Notable opportunities utilizing accounting methods
    1. Overall method changes
    2. Section 266 interest capitalization
    3. One-year deferral
    4. Other opportunities

Benefits

The panel will review these and other key issues:

  • How an accounting method is adopted
  • Planning opportunities utilizing accounting methods
  • Implementing a change in accounting method
  • Section 451 income recognition rules

Faculty

Houser, Cindy
Cindy Houser
Principal
CliftonLarsonAllen

Ms. Houser is Principal at CliftonLarsonAllen (CLA). 

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Slezak, Caitlin
Caitlin Slezak, CPA, MST
Director
Baker Tilly US

Ms. Slezak is the firm leader of Baker Tilly’s tax accounting methods practice. She specializes in...  |  Read More

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