Reconciliation of Accounting Financial Statements With Fiscal Financial

Statements
The difference between the recognition of income and costs between commercial and
fiscal accounting makes a difference in calculating the amount of taxable income. This
difference is due to differences in interests between commercial accounting which
bases profits on the basic concept of accounting, namely the matching of revenue with
associated costs (matching cost against revenue), whereas in terms of fiscal the main
objective is state revenue. In the preparation of fiscal financial reports, taxpayers must
refer to tax regulations, so that commercial financial reports made based on SAK must
be adjusted or made a fiscal correction before calculating the amount of taxable income.
The difference between commercial financial reports and fiscal financial statements can
be grouped into two, namely timing differences and permanent differences.
Timing differences are temporary differences due to the unequal timing of recognition
of income and expenses between tax regulations and SAK. Positive timing differences
occur if the recognition of accounting expenses is slower than the recognition of income
for accounting purposes. Negative timing differences occur if the tax provision
recognizes an income burden later than revenue recognition according to the tax
provisions.
Permanent differences are differences that occur because tax regulations calculate
fiscal profits differently from calculating profits according to Indonesian GAAP (SAK)
without any correction in the future.
Permanent differences can be positive if there are accounting profits that are not
recognized by the taxation and tax exemption provisions, while permanent differences
are negative due to expenses as accounting profit expenses that are not recognized by
the fiscal provisions.

Commercial
Fiscal Financial
Finanancial Fiscal correction
Statements
Statements