Barbosa Diego Esteban 1958437

Holguín Marianella 1958934

Ulloa Berrio Angie Tatiana 1958568

Contrasting tax accounting vs GAAP

Tax accounting GAAP

focuses on the transactions which have all financial transactions must be

an impact on the tax situation of the recorded and accounted.
company, with other transactions
being omitted
Tax accounting can be similar, but with The Generally Accepted Accounting
Principles is the compulsory method of
far more options available.
accounting for a public company

the tax accounting system allows for the in the production of financial
statements, Under GAAP the only
use of cash, accrual or modified basis
option is accrual basis accounting.
accounting.

Tax accounting does not need an Using GAAP, unpaid due expenses
accrual basis unless you report your accrue on the balance sheet.
company tax return as an accrual basis
taxpayer.

Tax regulations use everyday language GAAP rules are more technical and are
and easily understandable examples as designed for professionals with wide
they are not just meant for experienced financial knowledge who can fully
accountants but also business owners understand and apply them.

Discussion Questions
Should accounting principles be standardized across the world?
R: Actualmente y debido a la globalización, dichos principios se estandarizaron
bajo la figura de la NIIF (normas internacionales de información financiera),
brindando una solución a la irregularidad que se presentaba a partir de tener
principios contables en cada país, cabe resaltar que estas no tienen juicio en la
parte fiscal pues cada país en su soberanía ha grabado los impuestos
dependiendo de sus necesidades.
Barbosa Diego Esteban 1958437
Holguín Marianella 1958934
Ulloa Berrio Angie Tatiana 1958568

How could GAAP be made simpler?

R: Como se menciona en el punto anterior, gracias a las NIIF se hace más simple
la manera en que se presenta y se entiende la información financiera a nivel
mundial, haciéndola más comparable y de alta calidad.
Is it necessary to have two systems for accounting for tax? Why/ why not?
R: No, porque las normas fiscales y la manera de contabilizar los impuestos se
hacen de forma individual y de acuerdo a las normas de cada país, ya que no
están unidad a la información financiera.
Paraphrasis: Choose 3 excepts (minimum 2 sentences for each one) and
paraphrase them. English language must be used. Mechanical constructive.

1. Knowing the differences between these two methods of accounting will help
you determine the best method to use for your clients and your business.

Constructive: For you offer better options to your clients, you must have extensive
knowledge in both accounting methods.

2. Under GAAP the only option is accrual basis accounting. But the tax
accounting system allows for the use of cash, accrual or modified basis
accounting.

Constructive: When we talk about generally accepted accounting principles, we are

referring strictly to accrual accounting, as opposed to the flexibility offered by the tax
accounting system that allows the use of 3 methods: the use of cash, accrual or
modified base accounting.

3. Most business owners have a degree of knowledge on income taxes because

they usually check their returns and sign them.

Mechanical: Usually, business owners have a high level of knowledge about income
taxes because they commonly verify and sign their returns.
Barbosa Diego Esteban 1958437
Holguín Marianella 1958934
Ulloa Berrio Angie Tatiana 1958568