Expenditures are inflated to reduce or eliminate the reported profit of the project, thereby reducing the amount which the corporation must pay in taxes and royalties as these are based on the net profit. https://en.wikipedia...wood_accounting
Stan Lee, co-creator of the character Spider-Man, had a contract awarding him 10% of the net profits of anything based on his characters. The film Spider-Man (2002) made more than $800 million in revenue, but the producers claim that it did not make any profit as defined in Lee's contract.
The 2002 film My Big Fat Greek Wedding was considered hugely successful for an independent film, yet according to the studio, the film lost money. Accordingly, the cast sued the studio for their part of the profits. The studio has claimed the film, which cost less than $6 million to make and made over $350 million at the box office, lost $20 million.
Peter Jackson, director of The Lord of the Rings brought a lawsuit against New Line Cinema after an audit. According to New Line's accounts, the trilogy made "horrendous losses" and no profit at all.
The hugely successful movie Harry Potter and the Order of the Phoenix ended up with a $167 million loss on paper