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True North Communications is trying to explain its process of stretching out the goodwill costs of acquisition to federal accountants even as sources say the holding company is engaged in early talks with another potential suitor.
The Securities and Exchange Commission last week raised questions about how TN has amortized the costs of non-tangible assets, or goodwill, from acquisitions, the company said.
The SEC started poking around after TN and its auditors at Arthur Andersen went to the body over an accounting matter involving Modem Media, of which TN owns 46 percent.
Modem Media delayed its earnings report last Tuesday because of issues regarding goodwill over its acquisition in February 2000 of Vivid Holdings.
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