Prior to 1984, the corporation used principally accelerated methods for its U.S operating plants.
The cumulative effect of this change, which was applied retroactively to all assets previously subjected to accelerated depreciation, increased net income for 1984 by $11.0 million or $0.93 per common and common equivalent share. The impact of the new method on income for the year 1984 before the cumulative effect was insignificant.
2) Also from Financial Note 2, we know that, as a result of the review of its depreciation policy, the corporation, effectively November 1, 1993, had changed its estimated depreciation lives on certain US plants, machinery and equipment and residual values on certain machinery and equipment, which increased net income for 1984 by $3.2 million or $0.27 per share. No income tax effect was applied to this change.
3) From Financial Note 7, we know that the Salaried Employees Retirement Plan, which covered substantially all salaried employees in the U.S., had been restructured during 1984 due to overfounding of the plan. Effective August 1, 1984, the Corporation terminated the existing plan and established a new plan, which is substantially identical to the prior plan except for an improvement in the minimum pension benefit.
The effect of the change in the investment return assumption rates for all US plans, together with the 1984 restructuring of the US Salaried Employees Plan, was to reduce pension expense by approximately $4.0 million in 1984 and 20. Million in 1983, and the actuarial present value of the accumulated plan benefits by approximately 6.0 millions.
So, all these three changes had increase the profit by approximately 20.2 millions. So, actually, if the company hasnt made these changes, the financial report would still show a net loss. View More »