GAAP and Depreciation Question
So I had an IB interview for a boutique recently, and I was asked this question:
"Tell me how this affects the 3 statements: Let's say D&A goes up by 10 for GAAP purposes, but for tax purposes, your D&A only goes up by 5 dollars, and the tax rate is 50%."
What's the answer to this? I had no idea what the difference between GAAP and "tax purposes" was and after I flopped he told me it had to do with deferred tax assets.
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