Why is it important to record fixed assets in the corporate book instead of the tax book?

Question

Accepted Answer

Recording fixed assets in the corporate book ensures accurate financial reporting and compliance with accounting standards.

Corporate books reflect the true financial position of the company, aiding in decision-making.
Tax books may use accelerated depreciation methods, leading to lower asset values for tax purposes but not reflecting actual asset worth.
Investors and stakeholders rely on corporate books for assessing company performance and value.
Accurate asset recording helps in compliance with GAAP or IFRS, avoiding potential legal issues.
For example, a company may have a building valued at $1 million in the corporate book but depreciated to $600,000 in the tax book.

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