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What is the difference between accounting depreciation and tax depreciation?
Wiki User
∙ 12y ago
In accounting, depreciation is an allocation of a previous expenditure, while in economics depreciation represents a decline in current value.
Wiki User
∙ 13y ago
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Do you have to use the same depreciation for accounting and tax?
Tax department has developed theire own depreciation schedules for different assets class and use their own depreciations rather than using accounting depreciation and due to this accounting depreciation difference there is also difference in tax we pay and tax we calculate and called "Deffered Taxation"
How do you account difference between depreciation as book and depreciation as tax?
This will be found under "deferred taxes" on the income statement.
What is book depreciation mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
What is the difference between tax depreciation and book depreciation?
Tax depreciation is the one done based on Tax rules, for example certain asset purchased from sep 2010 to nov 2010 is eligible for 100% depreciation.] Book depreciation is the one based on corporate law . Vehicles depreciated for seven years. The net book value is the one represented in financial statements. Tax man will adjust profits based on tax depreciation rules and revise tax accordingly.
The accounting procedure that accounts for most of the deferred income tax liability for most companies is?
depreciation expense
What is book mean?
The depreciation rate for accounting may be different than that of taxation. The depreciation as per books of accounts may often be termed as book depreciation while that calculated under tax law is termed as tax depreciation.
What are the temporay and permanent difference of an account?
Account differences occur when accounting rules for Book and Tax accounts vary. A temporary difference will be balanced out over time - e.g. accelerated depreciation for tax purposes. A permanent difference will not be balanced out over time - e.g. tax on municipal interest (this has is non-taxable, but will show up on the books).
What does the accounting term EBITDA mean?
Earnings before interest, tax, depreciation and amortization. It means that accounting profit amount shown is after deducting all these expenses.
What is the use of depreciation?
Depreciation is the distribution of cost of asset over its useful life. It is calculated as depreciation is allowed as deduction from the income of entity while calculating its tax liability. The above answer is given in respect of Indian Accounting Standards.
What is the difference between gross and net dscr?
Gross DSCR= Cash accruals ( Profit after tax + Depreciation) + Interest ----------------------------------------------------------- Installments of loan + Interest Net DSCR = Cash Accruals (PAT + Depreciation) -------------------------------------- Installments
What can be done if depreciation is not a whole number?
Depreciation errors are generally corrected by the filing of an amended tax return or through the request of a change in accounting method. If an impermissible method of depreciation has been reported for at least two consecutive years, then a change in accounting method would be required to correct any errors.
What is difference between Tangible and real property tax rates?
There is absolutely no legal diffierence between except that all properties in these categories are are of different value or worth interms of depreciation.
