One criterion which will permit a deduction for an expenditure by an accrual-basis taxpayer prior to economic performance is that either the amount is not material or the earlier accrual of the item results in a better matching of income and expense.

Question

Quizplus · Accepted Answer

If an expenditure is not material or earlier recognition of the item results in a better matching of income and expense, then it may be deductible even if economic performance has not occurred yet.

One Criterion Which Will Permit a Deduction for an Expenditure