PPG to take first quarter charge related to U.S. health care reform
PPG Industries, Pittsburgh, will record a one-time aftertax charge in the first quarter 2010 of approximately $85 million, or 51 cents per share, as a result of a change in U.S. tax law that is part of the recently-enacted U.S. Patient Protection and Affordable Care Act (H.R. 3590), according to an April 8 release.
Under the prior tax law, the total amount paid for prescription drug costs for retirees over the age of 65 was tax-deductible. Beginning in 2013, however, these costs will only be deductible to the extent they exceed the amount of the annual subsidy PPG receives from the U.S. government under Medicare Part D. As a result of this change, the company’s deferred tax asset, which reflects the future tax-deductibility of these post-retirement costs, must be reduced under the requirements of U.S. accounting rules and recorded as a charge against earnings in the period that the change in the tax law was enacted.
Read the full release.