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    Inmokaly's Avatar
    Inmokaly Posts: 1, Reputation: 1
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    #1

    Sep 3, 2008, 02:32 PM
    GAAP vs Tax Accounting
    Hi,

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

    Thanks, :p
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
    Junior Member
    		  
    #2

    Sep 4, 2008, 07:44 AM
    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.
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