Tax Accounting vs GAAP
In the 21st century many laws and regulations have been
standardized but there are still some standards which are specific
to each country.
If you work in accounting in the US you will have heard of and
understand tax accounting, but your European counterpart will
have no idea what it is. Unlike a lot of countries where the
generally accepted accounting principles (GAAP) is the only
method for calculating tax, accountants in America have two
options; tax accounting and GAAP.
So to clear up the question: âWhat is the difference between
GAAP and tax accounting?â
The primary difference between the methods is that under GAAP,
all financial transactions must be recorded and accounted for
whereas tax accounting focuses on the transactions which have an
impact on the tax situation of the company, with other transactions
The Generally Accepted Accounting Principles is the compulsory
method of accounting for a public company. Tax accounting can be
similar, but with far more options available.
Knowing the differences between these two methods of accounting
will help you determine the best method to use for your clients and
WE'RE SORRY, BUT YOUR FREE VIEWS HAVE RUN OUT!
Please register or log in to continue.
We are happy that you like our content. We really are.
However, in order to provide a good service we need to charge a small licensing fee.
We have worked hard to create a great English learning experience for both
teachers and students. Thank you for supporting us.
Not convinced? Read our reviews and testimonials.
Create an account