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Can you lay out your understanding of how this works?- I get the feeling you don't even understand the basics. You are only taxed on profits so why would finan
by kevstev 2y ago
Can you lay out your understanding of how this works?- I get the feeling you don't even understand the basics. You are only taxed on profits so why would financing even be brought into the conversation?
- recursivedoubts 2y agoyeah, sure: money spent on dev salaries that are dedicated towards "research" aren't fully deductible in the year they are paid, instead you have to depreciate the cost over a number of years. that means your "profits" are higher in the first year because you can only claim a small percentage of the money you actually spent in cash terms. fine for a large company that has access to to financing and/or a large warchest to absorb the hit: in the long run it pencils out, but for smaller/newer companies that are run on a cash basis its brutal and very easy to get into a situation where taxes exceed profit. i think everything should be done on a cash basis in general, so what do I know