Having worked for many years on staff at corporate headquarters for a large corporation, I had plenty of opportunity to see how large $ issues were addressed and resolved. I was not a part of the financial side of the business, but I frequently worked directly with the Controllers Organization – as most staff did.

For the most part extraordinary big $ decisions are made using a very unemotional processes. Here are some considerations that were likely to influence decisions about issues like “when do we settle”.

• Comparing impacts on our P&L (Profit and Loss) statement, would it be better to settle this year or next?
• Comparing impacts to our net cash flow, would it be better to settle this year or next?
• Comparing executive compensation impacts, would it be better to settle this year or next?

Often, if we were going to report exceptionally bad results for this year we’d take all the bad hits we could and add them to this year's results. The idea being that we were going to look bad anyway, why not make next year look like a great improvement by taking all the hits we could this year.

Also if this year’s results were going to be exceptionally good, we’d load up this year with all the bad stuff (settle now) so next year didn’t look like a decline in performance year over year. Ideally this year's net would still look ok because the exceptionally good results could absorb the bad stuff.

In cases when this year’s results were unremarkable and next years outlook was relatively flat we’d delay settling until next year – assuming executive compensation wasn’t going to suffer by such a delay.

I’ve looked at the financials of Toshiba, NEC, Matsushta, Panasonic, and JVC. From the outside I can’t really draw any conclusions about which year they might lean towards. But I’m pretty sure that these same considerations are driving their decision.