we are talking about depreciation
2007-04-26 12:45:56 · 4 answers · asked by DEBBIE B 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
Yes it's definitely acceptable, and a very common practice. An example would be where the IRS allows an accelerated depreciation schedule, but a company uses a more conservative schedule for the books.
2007-04-26 15:35:20 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
Not only is is acceptable, it is usually required. GAAP based depreciation is depreciation based on an expected life of the asset. Tax based depreciation is set forth the the IRS.
2007-04-26 22:48:19 · answer #2 · answered by beached42 4 · 2⤊ 0⤋
Yes, it is common. Taxes are often calculated on a cash basis for the IRS but most companies use accrual accounting which makes calculating depreciation both ways necessary.
2007-04-26 20:51:19 · answer #3 · answered by TaxGurl 6 · 3⤊ 0⤋
It's not only acceptable, it's almost universal! Many of the IRS rules bear no relationship to the realities of business. And many of them fly squarely in the face of the GAAP so you often need one set of books for the IRS and another for the shareholders. Thank Congress for that.
2007-04-27 00:15:08 · answer #4 · answered by Bostonian In MO 7 · 0⤊ 0⤋