Hi,

I need to compare and contrast GAAP vs Tax Accounting :confused: . Can someone give some ideas?

Thanks, :p

For starters, GAAP is accrual based whereas tax is cash based. This will effect revenue recognition timing and the interpretation of the "matching" principle.

Here are some common differences that I will highlight:

DEPRECIATION - Tax uses a depreciation method known as MACRS whereas GAAP typically uses straight line (or a few other acceptable choices).

INTEREST REVENUE - GAAP recognizes when earned; municipal interest income is exempt for tax purposes.