Accounting MethodsSmall businesses. The new tax law allows small business taxpayers with average annual gross receipts of $25 million or less in the prior three-year period to use the cash method of accounting. The law expands the number of small business taxpayers eligible to use the cash method of accounting and exempts these small businesses from certain accounting rules for inventories, cost capitalization and long-term contracts. As a result, more small business taxpayers can change to the cash method of accounting starting after Dec. 31, 2017.S corporation to C corporation. An eligible terminated S corporation that needs to change from the overall cash method to an overall accrual method of accounting for its first year as a C corporation (due to revocation of S corporation election) must use a six-year adjustment period, per IRC Section 481(a). See Revenue Procedure 2018-44 for details.