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131 STAT. 2114 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(1) INCOME TAKEN INTO ACCOUNT IN FINANCIAL STATE- MENT.— ‘‘(A) IN GENERAL.—In the case of a taxpayer the taxable income of which is computed under an accrual method of accounting, the all events test with respect to any item of gross income (or portion thereof) shall not be treated as met any later than when such item (or portion thereof) is taken into account as revenue in— ‘‘(i) an applicable financial statement of the tax- payer, or ‘‘(ii) such other financial statement as the Sec- retary may specify for purposes of this subsection. ‘‘(B) EXCEPTION.—This paragraph shall not apply to— ‘‘(i) a taxpayer which does not have a financial statement described in clause (i) or (ii) of subparagraph (A) for a taxable year, or ‘‘(ii) any item of gross income in connection with a mortgage servicing contract. ‘‘(C) ALL EVENTS TEST.—For purposes of this section, the all events test is met with respect to any item of gross income if all the events have occurred which fix the right to receive such income and the amount of such income can be determined with reasonable accuracy. ‘‘(2) COORDINATION WITH SPECIAL METHODS OF ACCOUNTING.—Paragraph (1) shall not apply with respect to any item of gross income for which the taxpayer uses a special method of accounting provided under any other provision of this chapter, other than any provision of part V of subchapter P (except as provided in clause (ii) of paragraph (1)(B)). ‘‘(3) APPLICABLE FINANCIAL STATEMENT.—For purposes of this subsection, the term ‘applicable financial statement’ means— ‘‘(A) a financial statement which is certified as being prepared in accordance with generally accepted accounting principles and which is— ‘‘(i) a 10–K (or successor form), or annual state- ment to shareholders, required to be filed by the tax- payer with the United States Securities and Exchange Commission, ‘‘(ii) an audited financial statement of the taxpayer which is used for— ‘‘(I) credit purposes, ‘‘(II) reporting to shareholders, partners, or other proprietors, or to beneficiaries, or ‘‘(III) any other substantial nontax purpose, but only if there is no statement of the taxpayer described in clause (i), or ‘‘(iii) filed by the taxpayer with any other Federal agency for purposes other than Federal tax purposes, but only if there is no statement of the taxpayer described in clause (i) or (ii), ‘‘(B) a financial statement which is made on the basis of international financial reporting standards and is filed by the taxpayer with an agency of a foreign government which is equivalent to the United States Securities and Exchange Commission and which has reporting standards not less stringent than the standards required by such VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00062 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS