I've been reviewing the M&A 400 investment banking questions guide, and came across the question:
"How is GAAP accounting different from tax accounting?" and the answer is:
"1. GAAP is accrual-based but tax is cash-based. 2. GAAP uses straight-line depreciation or a few other methods whereas tax accounting is different (accelerated depreciation). 3. GAAP is more complex and more accurately tracks assets/liabilities whereas tax accounting is only concerned with revenue/expenses in the current period and what income tax you owe. "
On 1 and 2, I thought this wasn't always the case and was something that companies would choose? Can someone explain this answer to me?
SilverboyBaghs, pure crickets, that's where I come in. Any of these useful?
Fingers crossed that one of those helps you.
Sorry, bump
Velit ducimus quibusdam repudiandae atque id ea. Vel itaque placeat explicabo temporibus autem sequi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...