AOL announced in 2001 that because of a new accounting change (SEAS Nos. 141 and 142), earnings would be increasing over the next 25 years by

$5.9 billion a year. What change(s) required by the FASB (in SEAS Nos. 141 and 142) were expected to result in an increase in AOL’s income? Would you expect such an increase in earnings to have a positive impact on AOL’s stock price? Why or why not?

Did the increase in earnings materialize as expected? Why or why not? LO4