why interest is taken net of taxes and not principal in sfm....?is this universally applicable for sfm and accounts too
why interest is taken net of taxes and not principal in sfm....?is this universally applicable for sfm and accounts too
Interest expense is allowed as a deduction for the purpose of calculating your income taxes. Hence, it is taken net of tax while calculating Cost of capital, etc.
And this doesn't appy, in the case of Financial Accounting!
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