andrewlgood

8 ms·

1.
by andrewlgood 11mo ago
Silly argument. Everything in gravitational physics goes back to Newton? Who cares about Convex Optimization if you do not undertand gravity? Math goes back to Euclid and the Greeks? Mankind has consistently built upon existing knowledge
2.
by andrewlgood 11mo ago
Not correct. Capital Gains taxes depend on the holding period. Short term capital gains (stock held less than a year) are taxed at the same rate as salaries (ordinary income rate). Long term capital gains (stock held at least a year), ar
3.
by andrewlgood 11mo ago
Have you ever been a c-staff? C-staff are employees as well. Usually more expensive employees. Well run companies are trying to figure out how to win in the marketplace. To do this they hire the employees they need to win. Investors do
4.
by andrewlgood 11mo ago
Different markets. Companies are created to allow investors to create profits selling something (things, services, etc). Companies compete with other companies to attract capital. Companies which offer higher expected returns for compara
5.
by andrewlgood 11mo ago
Buybacks do not necessarily create an increase in stock price. Economically no value has been created. Cash on a balance sheet has simply been exchanged for shares. The people selling their shares in the buyout get the "value" o
6.
by andrewlgood 1y ago
As a former Finance person, it is interesting to see the panicked attitude of programmers toward AI and the resulting loss of job opportunities. Programmers have eliminated more jobs than almost any other group of people on the planet. I b
7.
by andrewlgood 1y ago
Every decision as to how to spend taxpayer money is political. There are always trade offs. The money could be spent on the military, enhancing social security, getting homeless people off the streets. These are all political decisions.
8.
by andrewlgood 1y ago
This sounds very similar to the challenge that companies had implementing Six Sigma (or other statistically-based quality programs). The tools significantly helped the average person improve the quality of their processes as determined by
9.
by andrewlgood 1y ago
The definition of capitalizable expenses tends to be the same between GAAP and tax. The depreciation schedules are frequently different.
10.
by andrewlgood 1y ago
Thank you for the clearer restatement.
11.
by andrewlgood 1y ago
Apologies, I was speaking to the more general idea of allowing firms to depreciate/amortize assets faster to juice hiring. In this case, the government ended the accelerated amortization for R&D which had been juicing the hiring f
12.
by andrewlgood 1y ago
For most items, there is harmony between GAAP and tax. Even though Section 174 is a tax code item, the implications of it must be properly presented on your GAAP financials. Therefore the auditors opine on it While one of the biggest diff
13.
by andrewlgood 1y ago
Amortization/depreciation is actually pretty important for understanding the performance of a company. Imagine a firm buys a piece of software to run its business. In year 1 it pays $10M for the software then $1M per year in maintena
14.
by andrewlgood 1y ago
Think of scientists developing drugs at a pharmaceutical company. They were significantly impacted by the change in deductibility.
15.
by andrewlgood 1y ago
For clarity, there is another section, Section 41, that addresses tax credits for R&D. This is still active.
16.
by andrewlgood 1y ago
Interesting perspective. Firms actually have to evaluate each year whether it is really an asset. If they determine that product is no longer useful, they would write off the remaining balance immediately.
17.
by andrewlgood 1y ago
IF the machinists are doing R&D, they get the same treatment as software engineers.
18.
by andrewlgood 1y ago
No. Not tied to a specific employee. The expense is simply capitalized then amortized over 5 or 15 years.
19.
by andrewlgood 1y ago
Short answer is yes. The finance team has to track each year’s expense as a “tax layer” and amortize it separately. By year 5, ignoring half-year or half-quarter conventions, if have a constant spend, the annual expense will be equal to f
20.
by andrewlgood 1y ago
For clarity, the issue at hand is the “Big Beautiful Bill” does NOT reverse the tax treatment. The request here is to change the bill to reverse the current treatment.
21.
by andrewlgood 1y ago
That is actually why software development was allowed to be expensed prior to 2017 - to keep innovation thriving in the US. In 2017, they US simply stopped giving preferential treatment to R&D.
22.
by andrewlgood 1y ago
Both parties do this to make spending bills appear smaller. This is why clean energy tax credits generally passed during Democrat administrations have to be periodically renewed.
23.
by andrewlgood 1y ago
Don’t need 60% for budget bills in reconciliation (the process of merging bills from the House of Representatives and the Senate). One of the times filibusters (which create 60% requirement) do not apply.
24.
by andrewlgood 1y ago
I think it was more along the line that R&D had been formally encouraged with special expensing rules and in 2017 they removed the special treatment.
25.
by andrewlgood 1y ago
Exactly
26.
by andrewlgood 1y ago
For startups that don’t make it five years the issue is moot. Expensing the software developers compensation in year 1 rather than over years 1-5 simply creates a larger taxable loss which creates a Net Operating Loss on the balance sheet
27.
by andrewlgood 1y ago
It’s not just software. Software developers are just the most vocal people talking about it. I worked a company that owned nuclear power plants. We did R&D on how to make the power plants work more efficiently and safely. Some of th
28.
by andrewlgood 1y ago
But the idea behind capitalizing research and development is to eliminate the difference in financial presentation between buying and building software. In both cases, one pays cash to acquire the software then uses it over a period of tim
29.
by andrewlgood 1y ago
Many people use depreciation and amortization interchangeably. From an accounting perspective one uses depreciation for tangible assets (can be touched and seen e.g. machinery) and amortization for intangible assets (e.g. trademarks and R&
30.
by andrewlgood 1y ago
For clarity, it is “scrap value”

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