CFA CFA General Impairment vs EBITDA

Impairment vs EBITDA

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    • huwabara
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      Hello fellow students,

      I have been trying to pull out some financial analysis lately. The least I can say is that it is much easier to read than to practice.

      Here is my question: Since EBITDA is not recognized by the GAAP and thus usually not reported on the IS, how does one compute it relative to the impairement of assets? In the waterfall of the IS, is impairment before or after the EBITDA?

      The most likely answer for me is EBIT = EBITDA – D&A – Impairments (impairments btw the EBITDA and EBIT) Can someone please confirm?

    • BeanCounter
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      That’s standard for most companies, yes (they define EBITDA as earnings excluding impairment (of tangible and intangible assets) ).

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