(1) The year to which the total income and necessary expenses of a resident in each taxable period are attributed shall be the taxable period to which the date when the total amount of income and necessary expenses are determined belongs.
(2) The value of assets acquired by a resident through purchase, manufacture, etc. shall be the amount obtained by adding the incidental expenses to the value of purchasing or manufacturing cost of such assets.
(3) Where a resident increases or decreases (excluding depreciation; hereafter referred to as "appraisal" in this Article) the book value of assets and liabilities he/she possesses, when calculating income in the taxable period to which the date of such appraisal belongs and the taxable period thereafter, the book value of the relevant assets and liabilities shall be the book value before appraisal: Provided That, the value of inventory assets, and the value of the securities prescribed by Presidential Decree shall be the face value evaluated for each asset in the manner prescribed by Presidential Decree. <Amended by Act No. 16104, Dec. 31, 2018>
(4) Notwithstanding paragraph (3), the book value of assets falling under any of the following subparagraphs may be reduced by method prescribed by Presidential Decree: <Amended on Dec. 31, 2019>
1. Stock assets which cannot be sold at the normal price due to damage, decomposition, etc.;
2. Tangible assets damaged or destroyed due to a natural disaster or other reasons prescribed by Presidential Decree.
(5) Where a resident applies the corporate accounting standards generally deemed fair and appropriate or customary practices continuously to the year to which the total amount of income and necessary expenses are attributed and the acquisition and appraisal of assets and liabilities in calculating income for each taxable period, except as otherwise prescribed otherwise in this Act and the Restriction of Special Taxation Act, such corporate accounting standards or customary practices shall apply.
(6) Matters necessary concerning the year to which the total income and necessary expenses are attributed pursuant to paragraph (1), calculation of the value of acquisition pursuant to paragraph (2) and appraisal of assets and liabilities pursuant to paragraphs (3) and (4) shall be prescribed by Presidential Decree.[This Article Wholly Amended by Act No. 9897, Dec. 31, 2009]