You are in the tax department at a large public accounting firm and you are working with your new client, Big Corporation. Big Corporation prepares their financial statements (Book Income) based on US Generally Accepted Accounting Principles (GAAP). The Controller is very familiar with GAAP accounting but is unsure about this need to adjust Book Income to Taxable Income and wants to understand it better. You have already identified five questions that the Controller has concerning these Book to Tax Differences from your first meeting. You are planning to meet again with the Controller to discuss those listed five items identified below, Items 1 to 5. For that upcoming meeting, please write in a paragraph or so for each item (i.e. 1, 2, 3, 4 and 5) so you can be prepared to verbally discuss with the Controller each item. There is no need for any references to tax law and do not worry about grammar or spelling since this will be your notes only for the upcoming discussion and the Controller wants to understand the concepts. As discussed above, please write a paragraph or so for each item. And here are the five items discussed with the Controller in the first meeting that you need to be ready to discuss at your next meeting for Big Corporation to help the Controller understand the issues listed below. Why is Taxable Income not equal to Book Income? This creates the need for searching for these Book to Tax differences and creates a lot of work. The Controller is worried all the work that will be involved and the cost of the tax advice and work.
You are in the tax department at a large public accounting firm and you are working with your new client, Big Corporation. Big Corporation prepares their financial statements (Book Income) based on US Generally Accepted Accounting Principles (GAAP). The Controller is very familiar with GAAP accounting but is unsure about this need to adjust Book Income to Taxable Income and wants to understand it better. You have already identified five questions that the Controller has concerning these Book to Tax Differences from your first meeting. You are planning to meet again with the Controller to discuss those listed five items identified below, Items 1 to 5. For that upcoming meeting, please write in a paragraph or so for each item (i.e. 1, 2, 3, 4 and 5) so you can be prepared to verbally discuss with the Controller each item. There is no need for any references to tax law and do not worry about grammar or spelling since this will be your notes only for the upcoming discussion and the Controller wants to understand the concepts.
As discussed above, please write a paragraph or so for each item.
And here are the five items discussed with the Controller in the first meeting that you need to be ready to discuss at your next meeting for Big Corporation to help the Controller understand the issues listed below.
- Why is Taxable Income not equal to Book Income? This creates the need for searching for these Book to Tax differences and creates a lot of work. The Controller is worried all the work that will be involved and the cost of the tax advice and work.
Book income is nothing but the company's income before taxes- the amount that the company shows to its shareholders and investors to give a brief idea as regards to the performance of the company.
Tax income is the income that the company reports in a tax return.
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