Cash Basis Profit & Loss

If your business is on the income-tax cash basis, this report restates your Profit & Loss on that basis.

Go to Reports, then Cash Basis P&L.

The report appears only when the cash basis is in force. Set it under Settings, then Self Assessment Settings - see The cash basis and the accruals basis.

The three columns

Each account carries three figures:

• Accrual - what the ordinary Profit & Loss shows: income when you invoiced it, costs when you incurred them.
• Adjustment - the movement in what you were owed and what you owed, which is what turns one basis into the other.
• Cash - income when you were paid and costs when you paid them.

Why it is a separate report

Your ordinary Profit & Loss and your Balance Sheet are untouched by this.

That is deliberate. The Balance Sheet is inherently accrual - trade debtors and trade creditors sit on it - so restating the P&L in place would stop the two agreeing, and retained profit would disagree with the balance sheet with nothing on screen to explain why.

A report that never claims to be the accounts can restate freely.

The capital deduction

On the cash basis, most capital spending is deducted when you pay for it rather than relieved through capital allowances.

The report derives that deduction and shows it as a step of its own, below the main restatement.

Do not transcribe this figure onto a return. The Self Assessment computation still claims capital allowances, so the two deliberately disagree, and the report says so.

Related

• Profit and loss
• The cash basis and the accruals basis
• Capital assets