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
Thanks so much!