Tax Accounting

Tax accounting is basically concerned with the calculation of income and profits as per income tax rules of the country. Most countries have slightly different methods for profit computation as per tax and accounting rules.

  • Differences between management accounting and tax accounting

    Differences between management accounting and tax accounting

    Financial accounting and reporting is only part of the broad field of accounting. Other significant kinds of accountinginclude management accounting and tax accounting. Management Accounting Management accounting is internal accounting designed to meet the information needs of managers. Although the same accounting system usually accumulates, processes, and disseminates both management and financial accounting information, managers’ responsibilities for making decisions and planning and controlling operations at various administrative levels of a business enterprise or not-for-profit organization require more detailed information than is considered necessary or appropriate for external financial reporting. Management accounting includes information that is normally not provided outside an organization and is usually tailored to meet specific managementinformation needs. Tax Accounting Tax accounting provides appropriate information needed by individuals, corporations, and others for preparing the various returns and reports required to comply with tax laws and regulations, especially the Internal Revenue Code. It is significant in the administration of…

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  • ad valorem

    Meaning of Ad Valorem

    Ad valorem is derived from a ‘Latin’ word which means ‘according to value’. Ad valorem is a tax or a duty levied by the state, local or municipal government on the assessed value of the asset or property and not on the volume of the asset or property of the assessee. Thus under ad valorem tax, value rather than volume of the asset or the property forms the basis of the taxation. Usually, state and local governments use an ad valorem tax system to levy property tax based on the determined value of the real estate property, but other taxes like VAT (Value Added Tax) and import duties levied by the government have also come under the purview of ad valorem tax. Ad valorem tax can be levied on a transaction or as an annual tax like property tax, VAT, and sometimes even on special cases like inheritance tax, stamp…

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