Income tax – timing – when is income from professional services derived?

This Interpretation Statement discusses general principles about when professionals can account for their income on a cash accounting basis (ie, when payment is received) and when they must use the accrual accounting basis (ie, when the income is “earned”). It also explains what it means for income to be “earned”, which may potentially be earlier than when a payment is received. The Interpretation Statement addresses the specific fact situations of doctors, directors and barristers, and when it may be acceptable to return income on a cash basis. It also explains how to change between the accounting bases (for example if the person has been using the wrong accounting basis).