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By this logic isn't it still better to make whatever profit they can by releasing it? Yes they would increase their net income (and thus tax burden), but they s
by dathery 3y ago
By this logic isn't it still better to make whatever profit they can by releasing it? Yes they would increase their net income (and thus tax burden), but they should still end up ahead (it's not like they're paying >100% marginal tax rate on those dollars). It must be more complicated somehow, right?
- bsder 3y agoNot necessarily. The writeoff is apparently immediate--they will book the writedown this quarter. Revenue, however, will stretch out across a couple of quarters. So, the accountants are making this quarter look better at the cost of future quarters looking worse.