One Advantage of Using After-Tax Income as a Performance Measure

question 48

True/False

One advantage of using after-tax income as a performance measure of divisional results is that it is a financial accounting measure that can also be used to compute organizational income.

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Definitions:

Identifiable Net Assets Method

An accounting technique used to value a company by identifying and valuing its tangible and intangible assets separately from goodwill.

IFRS

International Financial Reporting Standards are globally accepted standards for accounting, aiming at bringing transparency, accountability, and efficiency to financial markets around the world.

Bargain Purchase

An acquisition where the purchase price is significantly lower than the fair market value of the acquired assets.

Net Book Value

The value of an asset after accounting for depreciation or amortization, as displayed on a company’s balance sheet.