Who must complete Part II, Line 14, Total accrual to cash adjustment, and what must be included on this line?
A1. This line is completed only by a corporation with financial statements (or books and records, if permitted) prepared using an accrual method of accounting that uses an overall cash method of accounting for federal income tax purposes (or vice-versa). The corporation must report on Line 14 a single amount net of all adjustments attributable to the use of the different overall methods of accounting (e.g., adjustments related to accounts receivable, accounts payable, compensation, and accrued liabilities). Differences not attributable to the use of the different overall methods of accounting must be reported on the appropriate line of Schedule M- 3 (e.g., depreciation).
A-19: This line is completed only by a corporation with financial statements (or books and records, if permitted) prepared using an accrual method of accounting that uses an overall cash method of accounting for federal income tax purposes (or vice-versa). The corporation must report on Line 14 a single amount net of all adjustments attributable to the use of the different overall methods of accounting (e.g., adjustments related to accounts receivable, accounts payable, compensation, and accrued liabilities). Differences not attributable to the use of the different overall methods of accounting must be reported on the appropriate line of Schedule M-3 (e.g., depreciation). Q-20: What must be included on Part II, Line 17, Inventory valuation adjustments? A-20: Any amounts related to inventory valuation, for example, cost-flow assumptions, additional costs required to be capitalized to ending inventory (including depreciation), inventory shrinkage accruals, inventory obsolescence reserves
