eli5 How will DC get a tax write off for not releasing bat girl? How do tax write offs work anyways?

Question

eli5 How will DC get a tax write off for not releasing bat girl? How do tax write offs work anyways?

In: 2

Answer 1

A simple example. They spent 200m on film X, they have 400m in income from that film, profit of £200m. They make bat girl for £100m, they have income from that film of £0, a loss of £100m.

When it comes to tax they have an overall of £100m profit(£200m – £100m). They are effectively taxed on the the overall profit of the company not the individual films.

In reality it’s more complicated with groups and whatnot.