One objective of financial accounting is providing relevant information about the operating success or failure of companies. In this case, the measurement of LinkedIns expenses was very different before and after it was acquired by Microsoft, due principally to differences in the amount of amortization of intangible assets.

LinkedIn chose to disclose an alternative measure of its operations, Adjusted EBITDA. This measure ignores depreciation, amortization, interest, income taxes, and stock compensation expense. i. Would this measure have been affected the same way as net income by the acquisition accounting done by Microsoft? ii. Do you feel that ignoring amortization provides better information for investors than including amortization? Explain your answer.