3 important differences between SAP and GAAP vs 11 differences

luohuashengluohuasheng
in Odomirok.8-9-IS

for the Asset recognition, you mentioned under SAP "Asset is recognized when expense is incurred". Do you actually mean the DAC is recognized without defer? Since there is no such asset in SAP, saying 'asset' is recognized is confusing to me.

for "tax not deferred" under SAP, do you mean the deferred tax asset which is allowed by subject to strict admissibility test?

Thank you!

Comments

  • grahamgraham

    Here, the term "asset" could mean something like buying furniture for the office, not necessarily just a DAC asset. The example under the table in the wiki was just to demonstrate the idea of matching.

    Under SAP, you recognize the expense essentially when you buy it. Under GAAP, you can defer recognition until you actually start using the furniture in company operations and are generating income through its use. That's what "matching" of revenue & expense means.

    For the deferred tax, this is discussed more in the chapter 22/23 (SAP vs GAAP) so yes, this is what I was talking about there (the strict admissibility test). The table in chapter 8/9 was just an abbreviated list. I added a short note and a link to clarify.

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