In 2017, your client, Clear Corporation, changed from the cash to the accrual method of accounting...

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Accounting

In 2017, your client, Clear Corporation, changed from the cashto the accrual method of accounting for its radio station. Thecompany had a positive § 481 adjustment of $2.4 million as a resultof the change and began amortizing the adjustment in 2017. In 2018,Clear received an offer to sell the assets of the radio stationbusiness (this would be considered a sale of a trade or businessunder §1060). If the offer is accepted, Clear plans to purchase asatellite television business. Clear has asked you to explain theconsequences of the sale of the radio station on the amortizationof the §481 adjustment.

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Answer An accounting method change may involve switching from one permissible method to another or from an impermissible method to a permissible one A change in an entitys accounting method is a change in its overall plan of accounting for See Answer

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