UT Cockrell School of Engineering Entrepreneur-in-Residence Ben Dyer writes on his blog TechDrawl about all the reasons that traditional, GAAP accounting may not portray the actual condition of a company. He's referring to tech firms, where SaaS pricing plans and freemium strategies aren't necessarily indicative of the real momentum of the business, and differences between cash, accrual, and tax reporting may yield different conclusions to different observers.
What if the same types of arguments could be made about impact companies? What if traditional, GAAP accounting not only has difficulty with high flying apps but also with firms that consciously decide to pay decent wages and provide great benefits (both which hit the statements as "expenses", hurting profit and valuation...), or whose farming methods enhance the soil continually (at further expense) but the benefit of that (healthy foods later) won't be realized for years?
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