Page:United States Statutes at Large Volume 101 Part 2.djvu/1188

 101 STAT. 1330-394

PUBLIC LAW 100-203—DEC. 22, 1987

SEC. 10203. REDUCTION IN PERCENTAGE OF ITEMS TAKEN INTO ACCOUNT UNDER COMPLETED CONTRACT METHOD.

(a) IN GENERAL.—Section 460(a) (relating to percentage of completion—capitalized cost method) is amended— (1) by striking out "40 percent" each place it appears in the ,„,, text and heading thereof and inserting in lieu thereof "70 £ „ percent", and .^ I (2) by striking out "60 percent" and inserting in lieu thereof " "30 percent". 26 USC 460 note.

(b) EFFECTIVE D A T E S. —

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to contracts entered into after October 13, 1987.

(2) SPECIAL RULE FOR CERTAIN SHIP CONTRACTS.—

(A) IN GENERAL.—The amendments made by this section ' ''• shall not apply in the case of a qualified ship contract. (B) QUALIFIED SHIP CONTRACT.—For purposes of subpara, graph (A), the term "qualified ship contract" ^ ° ' means any "^ contract for the construction in the United States of not more than 5 ships if^ '' "T' (i) such ships will not be constructed (directly or indirectly) for the Federal Government, and ^ ^ >" ' < (ii) the taxpayer reasonably expects to complete such contract within 5 years of the contract commencement date (as defined in section 460(g) of the Internal Rever-r. k....: nueCodeof 1986). 26 USC 263A "°*®

SEC. 10204. AMORTIZATION OF PAST SERVICE PENSION COSTS. (a) IN GENERAL. — For purposes of sections 263A and 460 of the

Internal Revenue Code of 1986, the allocable costs (within the meaning of section 263A(a)(2) or section 460(c) of such Code, whichever is applicable) with respect to any property shall include contributions paid to or under a pension or annuity plan whether or not such contributions represent past service costs. (b) EFFECTIVE DATE.—

(1) IN GENERAL.—Except as provided in paragraph (2), subsection (a) shall apply to costs incurred after December 31, 1987, in ,,ii taxable years ending after such date. (2) SPECIAL RULE FOR INVENTORY PROPERTY.—In the case of any ... property which is inventory in the hands of the taxpayer— (A) IN GENERAL.—Subsection (a) shall apply to taxable years beginning after December 31, 1987. (B) CHANGE IN METHOD OF ACCOUNTING.—If the taxpayer

is required by this section to change its method of accounting for any taxable year— ,,,. (i) such change shall be treated as initiated by the taxpayer, ,,.,, (ii) such change shall be treated as made with the J,..,.., consent of the Secretary of the Treasury or his delegate, and (iii) the net amount of adjustments required by section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period not longer than 4 taxable years. "" Copy read " 'qualined ship contract' ".

�