Government to Clarify Acquisitions' Automatic Accounting Method Changes

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The government is likely to clarify that corporations can make automatic changes to their methods of accounting when they acquire other companies, in a followup to July guidance on the issue, Treasury Associate Tax Legislative Counsel Brandon Carlton says. Carlton says the fact that final rules (T.D. 9534) do not allow such automatic changes was an “oversight.” Those regulations addressed accounting methods to be used in certain corporate reorganizations under tax code Section 381.