Of financial accounting and tax accounting of the cost effectiveness of separation

Of China
Paper Keywords: accounting tax accounting cost accounting
Abstract: At present, the Financial Accounting system of tax regulations with a series of reforms, in the new accounting system and tax laws and regulations, accounting principles and are reflected in the tax laws and their relative independence of the principle of separation. This paper describes the Financial Accounting and tax accounting on the basis of the difference, starting from the cost-benefit analysis of Financial Accounting and tax accounting separation.


A Financial Accounting and tax accounting

Financial Accounting is a generally accepted accounting principles and accounting system under the guidance and specifications have been completed already occurred or the Economic operations of the recognition, measurement, recording, and the resulting financial information of enterprises and external interested parties to provide reports to meet the needs of their Economic decision-making as the goal of accounting. Tax accounting is a new edge of the accounting discipline, which is based on the current national tax laws as the yardstick to measure as the basic form of currency, the use of accounting theory and accounting methods , continuous, systematic and comprehensive form of tax calculated and paid, that tax-induced movement of capital accounting and monitoring a special accounting.

In recent years, financial accounting and tax accounting on the separation issue has been our accounting and tax circles of academia is a hot topic, the author analyzes the financial accounting and tax accounting based on the difference, the focus of cost-effectiveness of both the starting segregation.


2 Financial accounting and tax accounting differences

2.1 The fundamental purpose of the different
Development and implementation of enterprise accounting system is designed to truly and completely reflect the financial condition, results of operations and changes in financial position of the picture, for government departments, investors, creditors, managers and other users of financial statements to provide decision useful information. Therefore, the fundamental purpose of financial accounting is to provide investors or potential investors to understand the truth of corporate assets and earnings possibilities. The main purpose of the tax law is to ensure the country's fiscal income, to regulate Economic and social Development to protect the interests of taxpayers.

2.2 The main difference
Accounting entity, accounting information is reflected in a specific unit or organization, which regulate the spatial extent of the accounting work. In the main premise of accounting, accounting should be an enterprise of the transactions or events as objects, record and reflect the business itself the production and business activities, for accounting staff in daily accounting of all transactions and events on to make accurate judgments, accounting methods and procedures for making the right choices provided. accounting entity is based on accounting information needs of those accounting requirements of the unit, can be a legal subject, it can be an Economic mainstay.

Taxpayers, is directly liable to tax according to the basic tax unit (or natural), which is independent of the taxpayers tax law. In principle, standard tax system should be the main subjects of law as a tax, of course, were for the management needs of special provisions exception. For example, there is no legal personality of its head office and branches jointly and severally liable, should be a tax unit automatically consolidated tax payment, but the branches of foreign companies to be taxed as a separate unit to manage. the tax in the tax laws are provides an independent tax units (people), but because of legal registration system of enterprises that exist in various non-standard and the reasons for the financial system, has not been fully achieved by the standard legal body to define the basic tax unit.

Separation of financial accounting and cost-effectiveness of tax accounting principles different from 2.3
The corporate accounting system and tax laws serve different purposes, leading to two different purposes for the realization of their own principles there are significant differences. The basic principles that determine the choice of methods, and is the basis for professional judgments. In principle, the differences result accounting and tax treatment of the business and determine the basis for generating different. tax also follow some basic principles of accounting, but insisted on the legal principle of tax law, income balance principle, the principle of equity, anti-avoidance principles and facilitate the administrative management principles, such as sound or the principle of prudence, and many use the basic principles of accounting and financial accounting and has deviated from.

2.4 The accounting aspects of the different
Currently, tax accounting and financial accounting of the differences not only taxable income and deductible expenses should be recognized in time, but also involves the measurement of value; not only corporate income tax, but also various types of taxes Turnover taxes: not only income statement items, but also the balance sheet covers almost all subjects. enterprise income tax timing differences not only between, there are permanent differences and differences in our unique discretion. Since the accounting system and tax system, there are many differences, so the tax accounting often need to be based on accounting data necessary adjustments. Links http://www.hi138.com Research Papers Download

3 Financial accounting and tax accounting separation of cost-benefit analysis

3.1 The separation of financial accounting and tax accounting cost analysis
Financial accounting and tax accounting separation will inevitably produce more than one financial accounting and tax accounting when cost, are:
Establish separate cost accounting system, if the financial accounting and tax accounting to separate tax accounting to have its own independent and complete tax-related accounting system, to clear the difference of tax law and accounting to define, coordinate and processing, tax processing enterprises Difficulties encountered are basically clear accounting standards, which takes some costs.

The cost of processing, financial accounting and tax accounting separation will increase the daily treatment costs, companies not only for accounting, but also for tax accounting.

Human cost, financial accounting and tax accounting separation, companies need to set the full-time tax accountant, tax accounting workload has increased than before.

Other costs, according to business circumstances, there may be other specific costs. Financial accounting and tax accounting of the higher resolution, the greater the expenditure of these costs.

3.2 Financial accounting and tax accounting separation benefit analysis
If the business is established through the external financing need of external provision of statutory reports, there is public interest at this time of financial accounting and tax accounting for the higher degree of separation, the greater the gains. Specific features: First, the separation of tax accounting and financial accounting After their duties and corporate tax accounting information and financial accounting information quality have been improved greatly than before the separation, while the quality of accounting information in decision-making on corporate leadership can play a great help to enhance corporate management efficiency, and effectiveness in decision-making. Second, the tax accounting and financial accounting can enhance the separation ability of tax-related accounting and help enterprises to develop additional, effective tax planning, tax help companies avoid unnecessary losses, and tax programs in business face a variety of cases to choose from full use of various tax incentives. In addition, tax accounting and financial accounting will help standardize the separation of tax accounting business accounting, tax and accounting help to regulate the correct tax and the integrity of corporate tax, establish a good tax credit, increase tax corporate credit rating.

If the business is not established through external financing, managers are investors (such as state-owned enterprises, individual enterprises), enterprises do not exist to provide a statutory reporting requirements of external and no public interest issues, financial accounting and tax accounting at this time whether the gains from non-isolated significant change. If the force of its financial accounting and tax accounting separation, separation costs will be far greater than the separation of income.

3.3 Financial accounting and tax accounting separation cost-benefit analysis
Financial accounting and tax accounting separation benefit cost analysis
For the need of external financing are required to provide external statutory reporting, there is public interest in the enterprise, with the financial accounting and tax accounting separation of the increase, corporate earnings increases, cost will increase, the difference between the two is the business end The results obtained, only that it is positive and want to get results is also the prerequisite for enterprises to survive, if the separation of financial accounting and tax accounting allows companies make ends meet, the enterprise will ultimately not normal production operations, or even close down. With the separation of level increases, the separation costs will continue to grow, and the separation benefits but will increase as the separation becomes slow growth, so there is a "cost-benefits of a" maximum, this maximum will be based on business circumstances vary, but it is certain that this maximum will be 0-1 and close to 1 between the positions on. This is the first article are talking about moving closer to the accounting of enterprises, such enterprises produce isolated benefits outweigh the costs, so appropriate to adopt financial accounting and tax accounting separation between models.

Financial accounting and tax accounting one (or a low degree of separation), the benefit cost analysis

Without external financing for the establishment, the operator is to investors (such as state-owned enterprises, individual enterprises), to provide a statutory report does not exist outside the enterprise, there is no public interest issues of their separation benefits before and after these enterprises will be no significant change, but with the the financial accounting and tax accounting separation of the increased costs are spent growing, so revenue is greater than the cost of business more harm than good. So there is no need to have to increase corporate financial accounting and tax accounting separation, can move closer to the tax laws . which kind of business "income a cost" between the maximum value appears near 0 in the 0-1 position. This is discussed in the previous text of the enterprise to move closer to the tax law, using the financial accounting and tax accounting ecumenical relations model. reposted elsewhere in the Research Papers Download http://www.hi138.com

References
[1] in Changchun, "<tax accounting Research">, Northeast Finance University Press, 2001
[2] Ge Shu, financial accounting conceptual framework for the establishment of China's overall vision, Accounting Research, 2004
[3] Ge Shu, Accounting Theory: On the Structure of Financial Accounting Concepts, China Financial and Economic Publishing House, 2002 Links http://www.hi138.com Research Papers Download