New accounting rules developed in the wake of the Enron debacle have forced two large transportation companies to take charges in the first quarter of 2002.
The Financial Accounting Standards Board (FASB), which oversees the accounting industry, has instituted new "goodwill" accounting rules under its Statement of Accounting Standards No. 142 to discontinue the practice of amortizing goodwill and other indefinite, intangible assets.
That rule change forced truckload carrier Arkansas Best to take a non-cash impairment loss of $23.9 million for the first quarter of 2002, net of taxes. Rail giant CSX has also taken a hit. Richmond, VA-based rail conglomerate will take a non-cash, after tax charge currently estimated at $43 million, or 20 cents per share, to record the cumulative effect of this change in accounting principle.