A taxpayer's accounting method must clearly reflect the taxpayer's income.

The gross income and expenses of a resident company, and any other taxpayer who keeps or is required by Law to keep commercial books according to the accounting principles generally accepted in the Kingdom, shall be determined according to such books after adjusting the accounts so as to conform to the rules of this Law.

For taxation purposes, a natural person may record his transactions on a cash or accrual basis. However, if his gross income from business during a taxable year exceeds the amount specified in the Regulations, he must use the accrual method in all succeeding taxable years.

A company which keeps or is required by Law to keep commercial books must record income and expenses on an accrual basis. Otherwise, it may, for taxation purposes, use either the cash or accrual method.

Except for a change from the cash basis to the accrual basis required in accordance with paragraphs (c) or (d) of this Article, a taxpayer may change its accounting method upon obtaining the Department's consent.

If the taxpayer changes its accounting method, it must perform adjustments to items of income and deduction or to debt or any other items in the taxable year following the change, so that no item is omitted or included more than once.