Hi guys,
Why do we say that in this example we have one tax return statement and one income statement? I’ve never seen this before that the tax return statement has it’s OWN revenues, cogs etc.
Can someone please explain this? Makes me really confused…
In some countries, tax accounting has different rules than GAAP accounting. That’s why you get timing differences that create deferred tax assets and liabilities.
Aha okay so it is like one statement for GAAP and one for IFRS is that correct or?
Yup, it’s just a set of rules to apply.
Going line by line, you see that some items are identical, while others are not. Some tax rules treat items differently than under GAAP, e.g. PPE amortization.
Alright, thank for for your input! Appreciate it.
