What is the process for computing a corporation's taxable income, assuming the corporation must use Generally Accepted Accounting Principles (GAAP) to determine financial income? How might this differ for corporations not required to use GAAP?© BrainMass Inc. brainmass.com March 4, 2021, 10:45 pm ad1c9bdddf
The 'process' you are referring to is the reconciliation between GAAP net income and taxable net income. It is quite transparent in a corporate tax return because the balance sheet and the income statement (page 4 and page 1, respectively, of a Form 1120 report on the basis of GAAP. In that regard, the tax return will generally ...
In three short paragraphs totaling 176 words, the solution explains the process of reporting the differences between financial income and taxable income.
Update: In response to a student comment, a short paragraph has been added to explain differences for non-GAAP reporting.