Firms often provide supplemental disclosures that report and discuss income figures that do not necessarily equal bottom-line net income from the income statement. For example, in Twitter’s initial public offering filings with the SEC, the company reported a net loss of $79.4 million, but prominently disclosed “adjusted EBITDA” of (positive) $21.2 million. Discuss the merits and shortcomings of this managerial practice.

Firms often provide supplemental disclosures that report and discuss income figures that do not necessarily equal bottom-line net income from the income statement. For example, in Twitter’s initial public offering filings with the SEC, the company reported a net loss of $79.4 million, but prominently disclosed “adjusted EBITDA” of (positive) $21.2 million. Discuss the merits and shortcomings of this managerial practice.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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