...accrued," as used in the statute, and the term "paid or incurred," as used in the regulation, must both be construed "according to the method of accounting upon the basis of which the taxable income is computed under subtitle A." Sec. 7701(a)(25); sec. 301.7701-16, Proced. & Admin....

...to its earnings and profits for the taxable year." Section 7701(aX25) provides that the term "paid or accrued" shall be "construed according to the method of accounting upon the basis of which the taxable income is computed." AAF-UK was an accrual method taxpayer; generally, a tax liability accrues...

...shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different...