Tax accounting deals with accounting business (mainly tax-related business) in accordance with the provisions of the tax law.

The difference between them is adjusted by deferred income tax assets and deferred income tax liabilities.

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First, the specific performance of the differences between the accounting standards for enterprises and the tax law

1, the difference of historical cost in principle

Tax collection is a legal act, and its legality must be supported by reliable evidence. Compared with the fair value, the historical cost has weak correlation, but high reliability, which can provide strong evidence in tax-related litigation. Therefore, the tax law has the most positive attitude towards historical cost. Even if the accounting system gives up the historical cost principle in some cases, the tax law still adopts the policy of observing the historical cost principle. However, with the progress of technology and the intensification of competition, the price changes are obviously expanded and frequent, and the usefulness of historical costs is questioned in many ways. Fair value has attracted much attention and has been introduced into accounting standards more and more, which has become a trend. In recent years, China's standards such as "debt restructuring" and "non-monetary transactions" frequently use the concept of fair value, but they are hardly recognized by the tax law. Their different views and attitudes towards historical cost and fair value will inevitably bring many differences, and then a lot of tax adjustment will be carried out.

2. Differences in accrual basis

Accrual basis means that the recognition of income and expenses should be based on the actual occurrence of income and expenses, and all realized income and expenses in the current period should be treated as income and expenses in the current period regardless of whether the money is received or not. Accrual basis is the time basis of accounting confirmation, which involves all accounting matters. Accounting standards emphasize accrual basis as the basis of accounting, aiming at correctly reflecting the profitability of accounting units and accounting objects and providing true and fair accounting information. In economic business, enterprises must follow the accrual basis and conduct accounting on the premise of the occurrence of rights and obligations, which is consistent with the basic spirit of tax obligation determined by the tax law, but the tax law does not recognize a large number of accounting estimates brought by accrual basis. Generally, tax laws tend to adopt accrual basis in revenue recognition and cash basis in expense deduction.

3. Differences in the principle of prudence

First of all, accounting standards explain the principle of prudence, that is, in the face of uncertain factors, neither overestimate assets or income, nor underestimate liabilities or losses. The understanding of the principle of prudence in tax law emphasizes the prevention of taxation. Secondly, the accounting standards fully reflect the requirements of the principle of prudence, stipulating that enterprises can make provision for bad debts, inventory depreciation and short-term and long-term investment impairment. Enterprises can compare ending inventory, short-term investment and long-term investment with the method of lower cost or market price. The tax law only stipulates the provision for bad debts, but not the other seven provisions for impairment. In short, the tax law basically holds a negative attitude towards the principle of prudence, which has become an important source of income tax differences.

Second, the reasons for the differences between accounting standards for enterprises and tax laws

1, which have different functions.

Taxation is an important means for the state to participate in the distribution of social products. Its function is to raise financial funds, regulate the economy, and supervise and manage taxpayers' tax obligations arising from production and business activities. At the same time, tax supervision is the supervision of taxpayers' production and business activities, which is mainly realized through accounting records. Accounting system and accounting standards are formulated by the state according to the current economic situation and national practices, which are the basis for enterprises to record and reflect their production and business activities, and their functions are to reflect and supervise.

2. The contents of the two specifications are different.

Accounting standards for enterprises and tax law belong to two different branches in the economic field, which follow different rules and adjust different objects respectively. The purpose of the tax law is to ensure that the state obtains fiscal revenue in a mandatory, free and fixed manner, and to restrain and control the provisions of accounting standards according to the requirements of fair tax burden and easy collection and management.

The tax law follows the taxation behavior of the state tax authorities and taxpayers, and solves the problem of wealth distribution between the state and taxpayers, which is mandatory and free. Accounting standards are to reflect the financial situation, operating results and cash flow of enterprises, standardize enterprise accounting and provide accounting information truly and completely. Starting from letting all parties concerned know about the financial situation and operating results of enterprises, the goal of standardization is relevance and reliability. Although both are formulated by the financial department, they play different roles in establishing the market economic order. To put it simply, tax law is to safeguard national tax revenue, and accounting standards are to safeguard enterprise capital. Due to the rapid development of the capital market, the construction of accounting system has developed rapidly, and the provisions of tax law are more based on the needs of national macroeconomic development and on the premise of ensuring the realization of national economic development goals. Its development speed is not as fast as that of accounting system, and they lack the necessary communication and coordination.

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The following differences are for reference only:

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