Operating income before depreciation and amortization is abbreviated as OIBDA and it is a non GAAP measure of the performance of the business entities and corporation to show the degree of profitability in occurring business practices and business activities. OIBDA is a financial measure in which the profitability of the firm is measured before adding the effects of capitalization and the taxation structure within the business. In certain cases a number of organizations also neglect a number of other factors while calculating OIBDA. These factors involve those changes in the accounting structure of the organizations that don’t have a direct effect on the core operating results of the organization. Moreover it also excludes the income from the operations that are no more continued within the organization including the losses and earnings that occur due to subsidiaries.
The measure of operating income before depreciation and amortization is gaining momentum as a number of companies are moving away from using the income before excluding tax, interest, depreciation and amortization from the collected income. OIBDA is somewhat similar to the EBITDA that stands for earnings before earnings before interest, tax, depreciation and amortization. The only difference between the two is the numbers of income used for calculating these two figures. In calculating OBIDA the GAAP net operating income is used while in calculating EBITDA the GAAP net income is used. Non operating income is not incorporated in OBIDA as it is incorporated while calculating EBITDA.
Other Related Accounting Articles: