Reporting methods

You report your fishing income based on a fiscal period. A fiscal period is the time covered from the day your fishing business starts its business year to the day your fishing business ends its business year. For an existing business, the fiscal period is usually 12 months. However, it can be shorter than 12 months in some cases, such as in the first year or last year of your business.

Self-employed individuals generally have to use a December 31 year-end. To determine if you are eligible to have a fiscal year end that is not December 31, see the Reconciliation of Business Income for Tax Purposes guide and Form T1139, Reconciliation of Business Income for Tax Purposes.

You can report your fishing income using the cash method or the accrual method of accounting.

When you use the cash method, you:

• report income in the fiscal period you receive it; and
• deduct expenses in the fiscal period you pay them.

For more details on the cash method for fishing income, see Chapter 1 of the Fishing Income guide and IT433, Farming or Fishing - Use of Cash Method.

When you use the accrual method, you:

• report income in the fiscal period you earn it, no matter when you receive it; and
• deduct expenses in the fiscal period you incur them, whether or not you pay for them in that period.

When you calculate your income using the accrual method, include the value of all inventories, such as fish, fish by-products, supplies, and so on. For more details on inventories, see Chapter 1 of the Fishing Income guide and IT473, Inventory Valuation.

Changing your method of reporting income

If you decide to change your method of reporting income from the accrual method to the cash method, or from the cash method to the accrual method, see Chapter 1 of the Fishing Income guide for detailed information.

Forms and publications

• Fishing Income guide (T4004)
• Reconciliation of Business Income for Tax Purposes guide (RC4015)
• Form T1139, Reconciliation of Business Income for Tax Purposes
• IT433, Farming or Fishing - Use of Cash Method
• IT473, Inventory Valuation

Related topics

• Sole proprietorships and partnerships