SEC Chief Praises AOL Deal

The nation’s top securities regulator on Tuesday took the unusual step of praising the America Online-Time Warner merger deal--and its accounting method.

Securities and Exchange Commission Chairman Arthur Levitt, in an interview with Reuters, said he believes that AOL and Time Warner have recognized each other’s qualities. “I thought it was smart,” he said of the deal.

Levitt rarely comments on the merits of mergers.

In particular, he commended the purchase accounting method AOL plans to use, which will force it to write off so-called goodwill each year, rather than in a one-time charge (as in the pooling method).

“I think that a merger of this size employing the purchase method probably represents a clearer picture of the transaction to investors” than the pooling method, he said.