(a) The term taxable assets means the average total value of those assets which are properly reflected on a balance sheet the income or expenses of which are properly reflected (or would have been properly reflected if not fully depreciated or expensed, or depreciated or expensed to a nominal amount) in the computation of the taxpayer's alternative entire net income for the taxable year and in the computation of the eligible net income of the taxpayer's IBF for the taxable year.

(b) Taxable assets do not include:

(c) Tangible real and personal property, such as buildings, land, machinery and equipment, is to be valued at cost. Intangible property, such as loans, investments, coin and currency, is to be valued at book value. In determining the average total value of assets, the taxpayer must use the values described in this subdivision. The average value of assets is computed on a quarterly basis or, at the option of the taxpayer, on a more frequent basis, such as monthly, weekly or daily. Different periods of averaging may be used for different classes of assets. If because of variations in the amount or value of any class of assets, it appears to the Tax Commission that averaging on a quarterly basis does not properly reflect average total value of assets, the Tax Commission may require averaging on a more frequent basis. Any method of determining average total value of assets which is adopted by the taxpayer on any return and accepted by the Tax Commission may not be changed on any subsequent return without the prior written consent of the Tax Commission.

(d) The term balance sheet, for purposes of subdivision (a) of this section, shall mean the balance sheet of the taxpayer prepared from the books and records of the taxpayer in accordance with generally accepted accounting principles and used for purposes of preparing the taxpayer's financial statements. The book value of intangible property, for purposes of subdivision (c) of this section, shall mean the amount of the intangible property shown on the books and records of the taxpayer in accordance with generally accepted accounting principles and included in the balance sheet described in the preceding sentence. In the case of loans, the book value shall be loans net of the reserve for losses on loans.