Comment by thaumasiotes
6 months ago
Well, your actual profits and expenses are volatile. Is it bad for your accounting to reflect the reality of your company?
6 months ago
Well, your actual profits and expenses are volatile. Is it bad for your accounting to reflect the reality of your company?
> 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)
What? 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.