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| Topic: |
Business
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| Number of pages / Number of words: |
4 / 891 |
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Tax accounting falls under the laws of the Internal Revenue Service and is responsive only to changes in the income tax law. GAAP follows the guidelines of the U.S. Securities and Exchange Commission (SEC) and is responsive to market changes and creating uniformity in accounting methods for financial statements...
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For example, revenue recognition for lease fees collected in advance would be recorded when the income is earned under GAAP, yet in tax accounting the collection of the lease payment would be considered taxable income. Furthermore, under the matching principle for fixed assets GAAP allows multiple depreciation methods while MACRS is the only method used for depreciation under tax code law...
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