Generally, when considering the differences between the accounting treatment and the income tax treatment of a particular item the accounting treatment is based on:

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The accounting treatment is based on accrual accounting and is subject to the requirements of accounting standards. It is not necessarily based on cash flows or the income tax legislation, although tax laws may influence accounting rules. Depreciation charges may also be a factor, but they are not the primary basis for accounting treatment.

Generally, When Considering the Differences Between the Accounting Treatment and the Income