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Absolutely yes!
Remember that your accountant must present your financial reports to the IRS and your bankers using the rules, definitions and formulas known as Generally Accepted Accounting Practices (GAAP).
However, GAAP is NOT designed to help you make personal or business decisions.
To run your financial life or your business life, you can either develop your own system anyway you see fit, or adopt a model from someone else.
In fact, in business there's a HUGE difference between Financial Accounting (GAAP) and Management Accounting.
In short:
When reporting to the IRS, use IRS formulas and rules.
When reporting to the bank, use the banks rules.
When running your business or your life, use your own rules.
There's no conflict. It's not only legal, it's essential to being effective, efficient, and successful.
Wiki User
∙ 16y ago
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