> People always say this about "Hollywood accounting" but I seriously doubt that the tax authorities (for instance) just let film companies make up their profit figure.
Hollywood was invaded by organized crime a long time ago through the stagehands labor unions. Read the credits on a film sometime. Do you really need 20 catering staff on call? The method is to pad staffing, with people who aren't really needed, or in some cases don't even exist. The movie production company writes off the expenses, with payrolls and invoices to make the IRS happy. They show a loss on the movie. But the padded expenses come back under the table.
It makes the IRS' job harder that many films are made by production companies organized by the job, hiring staff and laying them all off when the movie is done.