Editor’s note: Section 2 of PL 13-71 added a new chapter 3 entitled Income Tax Regime for FSM Corporations.
This chapter has been subdivided into subchapters to improve its organization. Also, the numbering of the sections in PL 13-71 indicated an intent to subdivide this chapter into subchapters.
A major corporation may, at its option, change its fiscal year, provided that such a change may not be done more than once during any 60 month period without the advance written consent of the Secretary.
The taxable income of a major corporation shall be computed under the method of accounting which the major corporation regularly computes its income. To the extent permitted by IFRS or GAAP, as applicable, a major corporation may compute its taxable income under any of the following methods of accounting:
(1) the cash receipts and disbursements method;
(2) an accrual method;
(3) any combination of the foregoing methods or any other method selected by the major corporation. To the extent permitted by IFRS or GAAP, as applicable, a major corporation using any one of the above methods may, at its option, convert to another one of the above methods, provided that such a conversion may not be done more than once during any 60 month period without the advance written consent of the Secretary.