The Power of Perspectives

The Canadian Bar Association

Mayur Gadhia, CPA, CA

The practice

How costing WIP will have an impact on your law firm

By Mayur Gadhia, CPA, CA November 7, 2018 7 November 2018

How costing WIP will have an impact on your law firm

 

Historically, the Income Tax Act allowed designated professionals such as lawyers, doctors, and qualified accountants to exclude the value of their year-end work-in-progress. This approach was commonly referred to as billed-basis accounting (or BBA) because this amount was included in taxable income when the client was billed. 

Last year, the federal government eliminated BBA, albeit in a phased-in manner, for all fiscal years beginning after March 22, 2017. For the designated professionals, WIP is now deemed to be inventory as required by paragraph 10 (5) (a) of the Act.  

This change on accounting and costing of WIP will have an impact on law firms.  Here is how they will be affected.

Read More

Currently doesn't have any blogs.

Current Issue

Editor's Picks

Editor's Picks

Editor's Picks