Maybe. If you’re using tax depreciation based on generally accepted accounting principles (GAAP), then you’re okay. However, this is rare, so chances are you’re using the modified accelerated cost recovery system (MACRS) and/or expense election (IRC Section 179) depreciation that will result in an annual difference in your indirect rate calculations. This requires a book v. tax depreciation schedule to be maintained.
This is myth #10 of our SBIR Accounting Myths blog series. George Moker is a CPA and an entrepreneur who brings a real approach to managing the accounting needs of your firm. George created this series of blog posts to his more than 30 years of small business and startup experience in an attempt challenge the myths about an adequate accounting system and its importance within your organization.
For more information on how we can help with your SBIR accounting needs, please visit us at www.mokercpa.com