ABCS reclassified $3.85 billion of operating expenses as capital expenditures. Explain the effect this reclassification would have on ABCS cash flows (taxes ) ABCS actions were illegal and clearly designed to deceive investors. But if a firm could legitimately choose how to classify an expense for tax purposes, which choice is truly better for the firm's investors?
So what choice is better folks? The company ABC was in a large bankruptcy and they started to manipulate their statements to hide their financial problems from investors. They then got caught so what is better and why. How does this affect financial statement?