The accounting change whereby US companies have to cover future liabilities on non-pension post-retirement benefits for employees upfront rather than as they are incurred is generating enormous hits against profits for most big US companies, and AT&T Co will be taking the hit this quarter, estimating it at $7,000m, on the high end of the $5,500m to $7,500m it had previously estimated. AT&T has already said that 1993 net profit would include a gain of $500m from an income tax accounting change.
