Profits and losses for a partnership not using the cash basis have to be calculated in accordance with generally accepted accounting practice1.
If a trade or profession changes the basis on which it draws up its accounts from one acceptable basis to another, there may be receipts or expenses which are included under one basis but not under the other and may therefore not be taken into account as a result of the change. Consequently, any omitted receipts/expenses are brought into charge as a separate source of income called 'adjustment income', see B2.114–B2.116 .
Where the trade or profession is carried on by a partnership,
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