Where acquisitions have been made for cash, US GAAP requires that any goodwill be amortised over a period of up to 40 years. But where acquisitions have been paid for by issuing new shares, the “pooling of interest” rules say that goodwill is not to be written off. But some companies have been taking advantage of the pooling rules, then engaging in huge share buy-back programmes within six months of making an acquisition. The SEC has stepped in to say that such back-to-back deals are tantamount to cash purchases and has required at least two companies to restate their earnings. According to The Wall Street Journal Europe, US Office Products has had to change the way it has accounted for almost two dozen acquisitions, worth $533m, while Corporate Express has had to reaccount for a $172m acquisition. The SEC has warned that the pooling rule presents “an ongoing, chronic problem that companies must be more aware of when doing a pooling,” the WSJE reports.