Negative Pre-Tax Income - Right Tax Expense to Show on I/S?
Hi guys, have a question on how to show tax expense on the I/S when pre-tax income is negative.
Do you show the tax expense on the I/S as essentially a positive inflow equal to the tax rate times the negative pre-tax income, and then adjust on the cash flow statement (addition of DTA in amount equal to taxes paid)?
Or do you just show it as a 0 because technically that's the cash tax amount paid? This feels like it's mixing cash and GAAP accounting, but if I were just showing the P&L to someone, wouldn't I want to show that the actual cash tax amount was 0?
Thanks so much!
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