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Well, your actual profits and expenses are volatile. Is it bad for your accounting to reflect the reality of your company?
by thaumasiotes 1y ago
Well, your actual profits and expenses are volatile. Is it bad for your accounting to reflect the reality of your company?
- Havoc 1y ago> reflect the reality of your company Accounting is an exercise in standardization and communication. Like a network protocol you want different parts speaking the same language even if it requires some constraints and abstractions The info you describe is something you’d have FP&A/MI team do. There you can do whatever the team thinks is best to capture things in a unique manner Mixing the two is generally a recipe for disaster (and IRS audits)
- thaumasiotes 1y agoWhat? This is just the difference between cash accounting and accrual accounting. Using cash accounting isn't going to get you audited, or even raise any eyebrows.