“Fi­nancial ac­count­ing rules are cre­ated by the apo­lit­i­cal FASB to pro­vide information use­ful to investors. In con­trast, tax ac­count­ing rules are largely de­ter­mined by Congress to achieve such ob­jec­tives as rais­ing rev­enue, en­cour­ag­ing or dis­cour­ag­ing certain be­hav­ior, and re­dis­trib­ut­ing wealth. Two account­ing sys­tems are nec­es­sary, one for pur­su­ing so­cial ob­jec­tives through the tax sys­tem, the other for giv­ing in­vestors com­pa­rable, re­li­able and timely in­for­ma­tion. The U.S. is not unique in this regard. Every de­veloped coun­try has a tax ac­count­ing sys­tem that is sep­arate from its fi­nancial ac­count­ing sys­tem.”

Read the full article at WSJ.com.