Learn the ins and outs of GAAP vs. tax-basis accounting

Description

Abstract: Lenders need to understand the different accounting standards businesses may use in compiling their financial statements to ensure their borrower analyses are accurate. This article explains the differences between using Generally Accepted Accounting Principles (GAAP) and using a tax-basis reporting framework. The article notes that tax-basis reporting may be appropriate if a business is owned, operated and financed by individuals closely involved in day-to-day operations who understand its financial position.