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Sunday, May 25, 2014

Would you expect this increase in earnings to have a positive impact on AOL”s stock price? Why…

AOL announced that because of an accounting change (FASB Statements Nos. 141R [ASC 805] and 142 [ASC 350]), earnings would be increasing over the next 25 years by $5.9 billion a year. What change(s) required by FASB (in SFAS Nos. 141R and 142) resulted in an increase in AOL”s income? Would you expect this increase in earnings to have a positive impact on AOL”s stock price? Why or why not?

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