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i'd disagree heavily with that... let's say you have an expense of an insurance policy that covers you for the next 10 years. You're paying for 10 years of serv
by dsauerbrun 1y ago
i'd disagree heavily with that... let's say you have an expense of an insurance policy that covers you for the next 10 years. You're paying for 10 years of service, that should be amortized over 10 years.
- kccqzy 1y agoYeah but if the insurance policy requires me to pay upfront, I'm out the entire ten years' worth of insurance premium. Amortization forces it to be divorced from actual cash flow.
- charlieyu1 1y agoAmortisation is for accounting/tax purposes. A large negative on the first year does not make sense. It should be divorced from actual cash flow, because cash flow doesn’t tell you the full picture of the company, while assets/profits do
- kccqzy 1y agoI also didn't like the conventional definition of profit based on earnings. I'd rather look like free cash flow instead.