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To: Saulamanca who wrote (34160)	11/24/1999 7:28:00 PM
From: Benkea	Respond to of 99985

Wednesday November 24, 7:01 pm Eastern Time SEC staff warn of restructuring accounting gimics WASHINGTON, Nov 24 (Reuters) - U.S. Securities and Exchange Commission staff warned companies on Wednesday against using accounting gimics to meet market expectations for earnings during restructurings and mergers. SEC staff said they had seen examples of inappropriate restructuring charges and use of general reserves for future losses in inappropriate quarters to manage earnings. ''The staff has become increasingly concerned with apparent increases in inappropriate earnings management activities by public companies,'' the accounting bulletin said. SEC Chairman Arthur Levitt has been waging a crusade against earnings management, warning companies against resorting to gimmicks to meet market expectations for earnings results. Wednesday's staff bulletin follows one in August cautioning companies against omitting items from financial statements under the guise of being insignificant as a way of manipulating results. It was recommended that firms spell out costs that they will incur in restructurings and mergers, such as employee severance pay, dollars needed to shut down or move equipment out of a plant, and the bills for settling out contracts with customers. They also should tell investors what impact the restructuring will have on the company, its earning trends and its future operating costs. ''What the staff is telling people is that the general disclosures that are currently required (in) telling investors about the trends and operating costs of the company do, in fact, also apply to restructurings and one-time large writeoffs,'' Lynn turner, SEC chief accountant, told Reuters.