Both write-downs and restructurings reduce current operating income and boost future income by shifting future costs to the current period.

Question

Quizplus · Accepted Answer

Both write-downs and restructurings involve recognizing costs in the current period, which reduces current operating income. However, by doing so, both methods aim to improve future performance and profitability, either by reducing ongoing expenses through restructuring or by eliminating underperforming assets through write-downs. This can lead to a boost in future income, making the statement true.

Both Write-Downs and Restructurings Reduce Current Operating Income and Boost