How is parallel accounting conducted in ERP for profit tax? How does it differ from accounting?

Parallel profit tax accounting in ERP systems is conducted to simultaneously reflect tax obligations and expenses in terms of both accounting and tax accounting. This is necessary because tax accounting often differs from financial accounting in methods of recognizing income and expenses, depreciation, reserves, and other parameters.

Typically, ERP systems implement a separate tax register or tax chart of accounts, which is maintained in parallel with the financial accounting. When transactions are processed, the system generates entries in both accounting and tax accounting, considering the differences in rules.

Differences from financial accounting:

• Financial accounting reflects actual economic transactions according to accounting standards.
• Tax accounting considers operations in accordance with tax legislation, such as adjustments to the tax base, features of recognizing income and expenses.

Example: when calculating depreciation, financial accounting may use a uniform method, while tax accounting may use an accelerated method. ERP will create two parallel entries with different amounts and accounts to accurately reflect both positions.