BFGOODRICH ADOPTS NEW ACCOUNTING STANDARD FOR CERTAIN POST-RETIREMENT BENEFITS
BFGOODRICH ADOPTS NEW ACCOUNTING STANDARD
FOR CERTAIN POST-RETIREMENT BENEFITS
AKRON, Ohio, Oct. 22 /PRNewswire/ -- The BFGoodrich Company (NYSE: GR) today announced that it will adopt a new method of accounting for post-retirement health care and life insurance benefits.
BFGoodrich, like most companies, must adopt Statement of Financial Accounting No. 106 by no later than Jan. 1, 1993. It requires that companies estimate and then charge current earnings for the future costs of providing health care and life insurance benefits to employees after they retire.
The adoption of the accounting standard will result in a one-time charge against BFGoodrich earnings of $434 million before tax, or $286.5 million after tax ($11.27 per share), retroactive to Jan. 1, 1992. The company previously had accounted for its post-retirement health care and life insurance benefits on a pay-as-you-go basis. The charge, which reflects the estimated future cost of benefits already earned by retirees and current employees through 1991, will not affect the company's cash position.
In addition to the one-time charge, the company will also charge earnings $39.6 million before tax for 1992, an increase of $11 million over the estimated pay-as-you-go expenses for the year.
Although estimates of future post-retirement benefits can change significantly, BFGoodrich management believes that this change in accounting on an ongoing basis will not have a material effect on future earnings.
BFGoodrich supplies components and services to the aerospace industry, and produces specialty chemicals, vinyl resins and compounds.
/CONTACT: Rob Jewell, 216-374-2999, or Tom Waltermire, 216-374-2556, both of The BFGoodrich Company/
(GR) CO: The BFGoodrich Company ST: Ohio IN: CHM ARO SU: 278 10-22-92 09:22 EDT BM -- CL002 -- 3358 10/22/92 09:25 EDT