[superuser2]

Doesn't that work in the opposite direction? The "true" breakeven point is much lower than what the studios claim, not higher.

[messick]

Yes. "Hollywood Accounting" means cooking the books to make a success look like a failure when to comes to paying people (like the IRS) who get a percentage of the profit.

[petra]

How is it possible ? don't the IRS demand detailed recipts for every expense ? while sales are easily trackable.

[refurb]

They do have receipts since they own both sides of the transaction.

And to be honest, I'm not sure if the IRS cares since the profit gets taxed at some point in time.