mage67 (mage67) wrote,
mage67
mage67

More Creative Accounting

According to an April New York Times analysis, Verizon Communications executives, faced with a $1.4 billion loss last year (a situation which would have denied them performance bonuses), created a $389 million profit merely by deciding to value the company's pension fund "income" at $1.8 billion even though the pension fund was actually "swimming in red ink." Securities regulations apparently permit such quixotic valuations provided that they are explained to shareholders (which the executives did in a footnote in the firm's annual report). Thus, though having underperformed on the actual delivery of communications services (according to investors), Verizon executives nevertheless got their performance bonuses. [New York Times, 4-26-02]
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