Entrepreneurship & Small Business

fiscal year in which to report business income

  • Last Updated:
  • Apr 4th, 2020 10:43 pm
[OP]
Newbie
Feb 7, 2019
82 posts
31 upvotes

fiscal year in which to report business income

Hi there.
Quick question - my business end year is January 31. I had invoiced a client before end-year (and the work I did for them took place and was completed before the end of the last fiscal year). However, their payment was delayed because of a bank issue and I received in the current fiscal year.
For tax return purposes, should I report this income under last fiscal year or current fiscal year?
Thanks!
4 replies
Jr. Member
Apr 2, 2020
191 posts
73 upvotes
Income should be reported when the work is done not when the payment was received.
[OP]
Newbie
Feb 7, 2019
82 posts
31 upvotes
Pronoia wrote: Income should be reported when the work is done not when the payment was received.
Thanks for this. Are you able to provide a link to a CRA rule that states this? I just want to be on the safe side.
Newbie
Mar 29, 2010
22 posts
2 upvotes
There are 2 ways to reports , small business report as casher which is whenever you receive money or u pay, u record. Example: electricity is on december but billing is in feb, you pay in mar, Record in mar
Jr. Member
Apr 2, 2020
191 posts
73 upvotes
Jyelong wrote: Thanks for this. Are you able to provide a link to a CRA rule that states this? I just want to be on the safe side.
I doubt there is a link, and if you phone the CRA they probably won't know the answer.

Under accrual accounting though, your income is reported when you do the work.

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