Corporation A, which is involved in the distribution, warehousing, handling, and packaging of goods, invoices and receives revenue currently for such goods processing services to be rendered in the following six to 12 months. After finding that s. 12(1)(a) rather than s. 9 applied to include the advance fees in income, the Directorate stated:
Since the amounts are subject to paragraph 12(1)(a), Corporation A would be entitled to claim the reserve permitted by paragraph 20(1)(m). The reserve should be reasonable, based on the taxpayer's past experience or other factors and on the services to be rendered after the end of the year.