Comment / UPS, the SEC and goodwill treatment – a dangerous precedent is set

ID 151873951 © Nagy Denisa | Dreamstime.com

Today, let’s dissect a statement* released by the Securities and Exchange Commission (SEC) last Friday, 22 November.

(*Headed: ’UPS to Pay $45 Million Penalty for Improperly Valuing Business Unit’.)

The (watch)dog 

The government agency announced “settled charges against United Parcel Service Inc [UPS] for materially misrepresenting its earnings because it failed to follow generally accepted accounting principles (GAAP) in valuing one of its worst performing businesses”.

Bar M&A for a moment and consider that logistics integrator UPS, as well as its rival FedEx, are ...