A common adjustment for a self employed small business owner is depreciation expense for fixed assets (equipment, furniture, computers, etc). Some types of business assets are depreciated under slightly longer lives for California and the Section 179 expense limit is smaller for California than it is for Federal. The 2011 limit for Section 179 is $500,000 for Federal purposes but only $25,000 for California purposes.
If you have an asset that you can fully expense for Federal purposes but not California, then the remaining basis is depreciated for California purposes as a mini-asset. These differences create a difference depreciation expense amount, which results in an adjustment on Schedule CA (540) and a different net business profit on the California return. This difference is reported as an addition or subtraction to Line 12 (Business Income) on Schedule CA(540).