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Seems like many more than just Legislators could use some brushing up here (e.g. see post directly below this one...). While the differences between book and tax accounting are no doubt confusing to many, it is entirely reasonable that there be considerable differences between the two practices. After all, corporate accounting standards are typically set by the independent Financial Accounting Standards Board (FASB), while the Internal Revenue Code is a product of the political process between Congress and the While House. Tax rules are driven by broader public policy concerns rather than adherence to formal accounting practices. T So while Generally Accepted Accounting Principles[1] (GAAP) are intended to insure uniformity of companies’ financial statements and accounting methods,
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Mike Norman considers the following as important:
This could be interesting, too:
Seems like many more than just Legislators could use some brushing up here (e.g. see post directly below this one...). While the differences between book and tax accounting are no doubt confusing to many, it is entirely reasonable that there be considerable differences between the two practices. After all, corporate accounting standards are typically set by the independent Financial Accounting Standards Board (FASB), while the Internal Revenue Code is a product of the political process between Congress and the While House. Tax rules are driven by broader public policy concerns rather than adherence to formal accounting practices. T So while Generally Accepted Accounting Principles[1] (GAAP) are intended to insure uniformity of companies’ financial statements and accounting methods,
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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Seems like many more than just Legislators could use some brushing up here (e.g. see post directly below this one...).
While the differences between book and tax accounting are no doubt confusing to many, it is entirely reasonable that there be considerable differences between the two practices. After all, corporate accounting standards are typically set by the independent Financial Accounting Standards Board (FASB), while the Internal Revenue Code is a product of the political process between Congress and the While House. Tax rules are driven by broader public policy concerns rather than adherence to formal accounting practices. T
So while Generally Accepted Accounting Principles[1] (GAAP) are intended to insure uniformity of companies’ financial statements and accounting methods, similar activities may be treated very differently for tax purposes.[2] Therefore, it is possible for the financial reports of a company to differ from the tax returns prepared for the IRS because of the different accounting methods.
The Tax Foundation - Three Differences Between Tax and Book Accounting that Legislators Need to Know http://ow.ly/5Q64f— AT Institute (@ATInstitute) July 30, 2011