Can a property company confirm its income by cash basis?

Can a property company confirm its income by cash basis?

If the property management company is an enterprise, it generally does not adopt the cash basis, which does not meet the requirements of the accounting standards for enterprises and cannot accurately calculate taxes and fees.

The difference between accrual basis and cash basis;

Accrual basis is a method to determine the current income and expenses according to whether they belong to the current period or not.

Cash basis is a method to determine the current income and expenses according to the actual income and expenses received or paid in the current period.

Accrual basis and cash basis treat income and expenses differently, so the same accounting item may be treated on different accounting bases, and the result may be the same or different.

How do property companies confirm income?

Article 9 of the Accounting Standards for Business Enterprises-Basic Standards stipulates that an enterprise shall confirm, measure and report on the basis of accrual basis.

Accounting Standards for Business Enterprises No.26. 2 1 stipulates that the lessor shall recognize the rent of operating lease as the current profit and loss in each period of the lease term according to the straight-line method; If other methods are more systematic and reasonable, other methods can also be adopted.

Item (8) of Article 5 of the Guidelines for the Application of Accounting Standards for Business EnterprisesNo. 14-Income stipulates that the service fees charged for providing repeated services to customers for a long time shall be confirmed when relevant service activities occur.

Article 9 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the calculation of taxable income of enterprises is based on accrual basis and belongs to the income and expenses of the current period, regardless of whether the money is received or not. The income and expenses that do not belong to the current period, even if the money has been received and paid in the current period, are not regarded as the income and expenses of the current period, except as otherwise provided by this Ordinance and the competent departments of finance and taxation of the State Council.

Article 19 stipulates that the term "rental income" as mentioned in Item (6) of Article 6 of the Enterprise Income Tax Law refers to the income obtained by enterprises from providing the right to use fixed assets, packaging materials or other tangible assets.

Rental income, according to the date when the lessee pays the rent as agreed in the contract, confirms the realization of the income.

Item (4) of Article 2 of the Notice of State Taxation Administration of The People's Republic of China on Several Issues Concerning the Recognition of Enterprise Income Tax Revenue (No.875 [2008] of the People's Republic of China) stipulates that if the following services meet the conditions for income recognition, the income shall be recognized in accordance with the regulations, and the service fees charged for providing repeated services to customers for a long time shall be confirmed when relevant labor activities occur.

According to the above provisions, in accounting, the lessor shall recognize the rental income as the current profit and loss of each period of the lease term according to the straight-line method; If other methods are more systematic and reasonable, other methods, such as enterprise income tax, can also be used to confirm the income according to the date when the lessee collects the rent as agreed in the contract.

For the provision of property services, accounting and corporate income tax treatment, income is recognized when related labor activities occur.

The above text is about "is it ok for property companies to confirm income on cash basis?" A detailed answer to this question. If our property company applies the accounting standards for business enterprises, then the cash basis cannot be used to confirm income. Bian Xiao also summarized the methods of income confirmation of property companies for reference only!