17- previous point). This procedure has been easier than to request au-thorization under the special provisions relating to accelerated depreciation. 22. Loss carry-overs: Operating losses incurred beginning January 1, 1965 can be offset against income of the succeeding five years up to the total income obtained in each year. If a fiscal year includes part of 1964 and part of 1965, only the portion of the loss applicable to 1965, determined proportion-ately on a daily basis, can be carried over. For a loss to be carried over, it must be both a book and tax loss. If, because of reconciling items (non-deductible or non-taxable) the tax loss for the year differs from the book loss, only the lesser amount can be carried over. Therefore, it is important to maintain adequate accounting control over losses to be carried over, probably by means of memorandum accounts. This is a very important innovation in Mexican tax legisla-tion, since previous laws had never permitted the carry-over of losses of previous years, but treated the operating results of each year independently; it frequently happened that income taxes had to be paid when in reality, because of accumulated losses, there were no profits. The only carry-over of losses permitted previously related to the tax on distributable profits, which has now been repealed. 23. Amortization of expenses in connection with the _issuance of bonds:_ Expenses incurred in connection with a bond issue (discounts, premiums, commissions, etc.) are amortizable in proportion to the bonds paid each year. The previous law provided for amortization based on the term of the issue. 24. Amortization of leasehold _improvements :_ Construction, installations or permanent improvements to leased property which, in accordance with the lease contract or con-cession become the property of the lessor, are amortizable over the period of the related contract. The new law provides that if the period of the contract is indefinite, the amortization will be over a five-year period, unless a specific authorization of the Treasury Department is obtained to use a different period. Repairs and maintenance of leased property which do not represent additions or improvements to the fixed assets continue, as is the case with owned assets, to be deductible in the year in which they are incurred.