[Verse 1] Sarah's staring at the ledger, numbers dancing on the page Accounting profit looks so clean, but tax won't play that game She needs to bridge two different worlds, where rules don't quite align Transform that book income today into the taxable design [Chorus] Permanent differences vanish forever Temporary ones reverse, now or never Meals cut in half, entertainment too Fines forbidden, depreciation's through Switch to CCA, let the government decide Book-to-tax adjustments are your guide [Verse 2] Client dinner cost five hundred, but the taxman says "not quite" Only fifty percent deductible, cut that appetite Political donations, fines for breaking bylaws too These expenses hit the books but tax will not pursue [Chorus] Permanent differences vanish forever Temporary ones reverse, now or never Meals cut in half, entertainment too Fines forbidden, depreciation's through Switch to CCA, let the government decide Book-to-tax adjustments are your guide [Bridge] Timing creates the temporary maze Depreciation versus CCA's ways Book says straight-line, tax says declining balance Future will correct this temporary imbalance [Verse 3] Equipment depreciation, forty thousand on the books But CCA allows just thirty, need a second look This timing difference builds a bridge across the years When book exceeds the tax amount, deferred tax appears [Chorus] Permanent differences vanish forever Temporary ones reverse, now or never Meals cut in half, entertainment too Fines forbidden, depreciation's through Switch to CCA, let the government decide Book-to-tax adjustments are your guide [Outro] From accounting income start your calculation quest Add back permanent items that the tax law has suppressed Adjust for timing differences, let deferred tax unfold Transform those book profits into taxable income gold
← Corporate Taxation | Capital Cost Allowance (CCA) Basics →