The Choice Of Corporation Accounting Policy And Tax Planning

For a corporation, the process of income tax planning is a process of choosing accounting policy. In order to analyze the choice of accounting policy for tax planning, we shall discuss the main content of accounting policy in the report. Meanwhile, depreciation of plant assets and amortization of intangible assets are so important for tax planning that we also discuss these topics.There are some parts in corporation accounting policy: foreign currency exchange, revenue confirming, income tax accounting, inventory costing, loan expense accounting, long-term investment accounting and bad debt accounting. Sometimes, the income before tax according to accounting principle is different from the taxable income according to tax law. Income tax accounting is just to account the difference and is not influential consideration in tax planning, but all the others influent revenues or expenses and income tax of corporation. In this report, we discuss the relational law and accounting principles at first and then analyze the income after tax in different accounting policy to get the best one. At the same time, the results are different when the corporation has different objective or faces different situation. This point is very important.