In a newspaper article dated 27 April 2019 entitled ‘Flight Centre turbulence as guidance cut, shares hit’ (by Sarah Danckert, The Age, p. 1), it was noted that the travel company Flight Centre expects its ‘underlying profit before tax’ to fall below the range it had previously signalled to the share market (i.e. to fall to between $325 and $360 million, which was below the $390 to $420 million it initially targeted). This ‘underlying profit’ measure was different from the profit to be reported within the financial statements.

REQUIRED

Is the organisation allowed to use and disclose this alternative measure even if it fails to comply with accounting standards? Why would the managers do this?