AT&T Inc. on Thursday announced that it expects to incur a pretax, non-cash charge of roughly $2.7 billion in the fourth quarter as a result of a change in its accounting practices.
In a press release, AT&T said it is changing its method of recognizing gains and losses for its pension and other post-retirement benefits.
The carrier said it will recognize these gains and losses in the year in which they are incurred, rather than being amortized over a period of several years. The company will record such gains and losses on its income statement in the fourth quarter each year.
AT&T expects the change to a market-based approach will result in simpler, more transparent financial results by linking results directly to current market returns, interest rates and health care costs,” the telecommunications provider said. The change will not impact AT&Ts cash flow or pension funding requirements.”
AT&T will release its fourth-quarter results on Jan. 27.