U. S. Shoe Corporation reported the following income statement information:

U.S. Shoe Corporation Consolidated Statement of Earnings (Partial)

(Dollars in Thousands)

1991 1990 1989 Earnings (loss) before cumulative effect of accounting change ($27,662) $49,187 $12,965 Cumulative effect of accounting change related to product maintenance contracts, net of tax effect of $2,343 (3,621) — —

Net earnings (loss) ($31,283) $49,187 $12,965 Note (3) Accounting Change (Adapted)

In December 1990, the Financial Accounting Standards Board issued a technical bulletin on accounting for product maintenance contracts such as those sold by the company’s optical retailing group. The bulletin requires the defer ral and amortization of revenue from the sales of such contracts on a straightline basis over the term of the contract (one to two years). Under the accounting method previously followed by the company, a portion of the revenue earned from the sale of eyewear product maintenance contracts was recognized on the date of sale and the remainder was deferred and amortized on a straight-line basis over the term of the contract.

Effective at the beginning of 1991, the company has elected to adopt this new accounting method for all contracts in place. The effect of this change is to increase the net loss in 1991 by $4.3 million, including $3.6 million, which is the cumulative effect of the accounting change.

If this change in accounting method had?