||GAAP financial statements may provide the fairest presentation of a company's financial position. However, many small companies do not need or want to incur the costs of GAAP financial statements. For these companies, using an other comprehensive basis of accounting (OCBOA) such as the cash or modified cash basis, or the income tax basis might be a cost-effective alternative. Practitioners most frequently select the income tax basis for OCBOA statements. First, many GAAP requirements do not have to be incorporated into income tax basis financial statements and second, most of the cost of financial reporting has already been absorbed in the preparation of the tax return. Modified cash basis can be simpler than the income tax basis. In addition, since its primary objective is financial reporting, choices made under the modified cash basis are not geared towards lowering taxable income and can arrive at a fairer net income.