U.S. GAAP Vs. Income Tax Accounting

[Gregoryssimp]

Hello all,

 

Companies follow different accounting rules for financial reporting and tax filing. In the United States, generally accepted accounting principles (GAAP) are used in financial reporting, whereas the Internal Revenue Code, the tax code, is used in tax filing. GAAP and the tax code have different ways of recognizing revenues and expenses, among other things. As a result, pretax income calculated using GAAP and taxable income calculated using the tax code often are different. Because of the different amounts in the income basis between GAAP reporting and tax filing, income tax expense reported for book purposes and income tax payable filed for tax purposes also will be different.

 

Thanks and Regards

Gregorys simp