When you spend money on manufacturing and equipment, a company does not get to write off the full amount against their taxes when they buy it - they may have to spread it over a period of useful life of that equipment.
Unfortunately, accounting is full of concepts like this.
Ideas which conceptually make accounting “better reflect” the real word, but in reality add a lot of complexity for very little benefit. Getting rid of accrual accounting and simply allowing full expensing of asset purchases with losses to carry over to the next tax period would save everyone a lot of headaches, for a negligible reduction in government tax revenue.
It would also make a lot of accountants redundant, which is probably the main reason they oppose streamlining accounting practices.
