[Abstract]
The objective of this paper is to examine the reporting of deductions on the basis of right decision in perspective of tax equity, real taxation, public policy, and economic or social policy.
It begins by examining contents and characteristics of the accrual basis and right decision basis on which we report the taxable income in the period when right occurs, and comparing the relationship of the two bases.
In the next place, it analysis that Tax Law has timelessly to be adjusted according to the radical changes in the industrial society.
Inflexibility of Tax Law in changing environment is due to, in part at least, the general rule governing tax deductions. It requires some rigid restrictions to deduct besiness expenses from gross income.
Lastly, this paper presents several problems and approaches to their solutions in some specific cases of economic obligations, not specified in Tax Law, orising from changing economic environment.