The determination of basis periods is very importance in determining the period in which income

arising is recognized, expenses are treated as incurred and capital expenditure on assets is

treated as incurred.

State with reasons, the basis period for YA 2020 for the following scenarios:

a. XYZ Bhd, a manufacturer of furniture, commenced operations on 1 October 2013. The

company makes up its accounts annually to 30 September. There is failure to close

accounts to its normal accounting date and accounts are prepared for a period of more than

12 months from 1 October 2019 to 30 April 2021, and to 30 April for subsequent years.

b. On 1 March 2020, Fair Sdn Bhd, a trading company which makes up its accounts annually

to 31 March, was taken over by Good Bhd. Good Bhd closed its accounts to 31 October

annually. The last normal accounts of Fair Sdn Bhd are for the year of assessment 2019

covering the period of 1 April 2018 to 31 March 2019.

c. Bayu Sdn Bhd's accounts are normally prepared ending on 31 July. The company changes

its accounting date and the accounts are now closed on 31 October. Accounts are prepared

as follows: 1 August 2018 to 31 July 2019, 1 August 2019 to 31 October 2019, 1 November

2019 to 31 October 2020, and to 31 October for subsequent years.

d. Fast Faster Bhd commenced business on 5 November 2019. It closes its first account to 31

March.

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