A Bahamian partnership of which the taxpayer was a member purchased bonds at less than 10% of their maturity value, recorded the bonds in its financial statements as having a cost equal to the maturity value, and recorded a resulting loss when the bonds were sold within the following two years for values ranging from 10% to 14% of maturity value.
In finding that the Minister had correctly disallowed the deduction by the taxpayer of his share of the supposed losses on these bonds, Sharlow J.A. indicated that the accounting method followed by the partnership violated the principle established in the Canderel case, 98 DTC 6100 "that an accounting method is not acceptable for income tax purposes unless it results in an accurate determination of income" (p. 6412).
Sharlow J.A. went on to indicate (at p. 6412) that "in this context, 'accuracy' means reasonable accuracy, bearing in mind that any computation of profit may involve estimates and judgment calls relating to timing, allocation, estimates of value, and other such matters that accountants are often called upon to make".