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The abbreviation “OCBOA” stands for “other comprehensive basis of accounting.” Simply stated, it means any basis of accounting — the method in which a business keeps its books — other than GAAP (generally accepted accounting principles).

Examples of OCBOA include cash-basis accounting and tax-basis accounting.

In my experience with business clients in the real world, none use GAAP. All use OCBOA. (This is my experience with my clients.) The only clients I have who use GAAP accounting are a couple of not-for-profits who need audited financial statements (I help keep the books but a different firm does the audit). Otherwise all of my business clients use the tax basis of accounting.

(If I wanted to be snide, I would say most businesses use “unkempt disaster area that’s dumped in my lap to try and pick through so I can toss a tax return together for them” as their method of accounting, but I digress.)

As a reminder, tax basis does not necessarily = cash basis. A business can use accrual-basis accounting and be on the tax-basis of accounting at the same time.