The "tax and commercial balance sheet" refers to two different accounting approaches used in accounting to represent the financial position of a company: the commercial balance sheet and the tax balance sheet.
The commercial balance sheet is an accounting method used by companies to present their financial situation and performance in accordance with generally accepted accounting principles (GAAP) or international accounting standards (IFRS). It is often used for external reporting purposes such as communication with shareholders, creditors, and other external stakeholders. The commercial balance sheet follows the accounting regulations set by the relevant regulatory authorities or accounting standards and includes the preparation of balance sheet, income statement, and notes.
The tax balance sheet is an accounting method used by companies for tax purposes and may differ from the commercial balance sheet. The tax balance sheet takes into account tax regulations, deductions, incentives, and rules set by the tax authorities. It may result in certain items being valued or disclosed differently in the tax balance sheet than in the commercial balance sheet. The tax balance sheet serves as the basis for calculating a company's tax liability.
Typical features of software in the "tax and commercial balance sheet" area may include:
Dual accounting system: Support for simultaneous preparation of commercial and tax balance sheets, considering differences and adjustments between both accounting approaches.
Automated calculations: Automated calculation of balance sheet items, tax deductions, depreciation, and other relevant tax and accounting information in accordance with applicable regulations.
Customizable reporting: Generation of reports and financial documents for commercial and tax accounting purposes, including balance sheet, income statement, notes, as well as specific tax reports and documents.
Compliance management: Monitoring changes in tax regulations and accounting standards to ensure that the company's accounting methods and practices comply with current legal requirements.
Documentation and audit trail: Maintaining complete documentation of entries, adjustments, and calculations related to the commercial and tax balance sheets to enable a legally compliant audit.