Doug wrote: > In the national income accounts, the first estimates > of profits are based on what corps report to shareholders. > As the IRS tax data becomes available, which is with a > delay of two or three years, BEA uses that to update their > figures when the annual revisions are released every August.
This is interesting. As far as I know the US is one of the few countries in which financial accounting and tax accounting are separate. As the argument goes, the IRS reports suffer from that they are extremely conservative and almost always backward looking. Moreover, the IRS accounting does not contain much information on the intangible assets, if any. On the other hand, GAAP reports presumably take into consideration the future prospects of the firms and hence are better sources of information on the performance of a company. I expect that BEA has developed a rules based approach to update their numbers when IRS data becomse available but how "scientific" is their approach is a question I have. Also, assuming that both IRS and GAAP reports are truthful, which one is more relevant for profit calculations? Moreover, I have no idea how one would "correctly" value intangible assets. Best, Sabri
