SAMPLE LETTER SENT TO COMPANIES REPORTING CHARGES




                                   January x, 1999

Name
Chief Financial Officer
XYZ Corporation
Address


Dear Chief Financial Officer:

     We understand that you will report significant charges in
1998 for asset write-downs, restructuring activities, or acquired
in-process research and development.  In connection with our
focus on transparent financial reporting and potential earnings
management issues, we may select your 1998 annual report for
review.  For your consideration as you prepare that filing, this
letter identifies commonly requested MD&A and financial
statements disclosures that may be applicable in whole or part to
the kinds of charges you incurred.

Asset Impairments

Disclose:

     *    Description of the assets and the segments affected

     *    Reasons write-downs became necessary

     *    Amount of loss for each material asset category
          - Property, plant & equipment
          - Intangible assets

     *    Method of determining fair value

     *    Classification of loss in the statements of operations

If the assets are held for disposal, disclose:

     *    Carrying amount of assets held for disposal and subsequent
          changes in carrying amount

     *    Expected disposal dates

     *    Results of operations for the assets to the extent that
          those results are included in the period and can be identified

     *    Effect of suspending depreciation

Costs to Exit Activities

Disclose:
  
     *    Activities to be discontinued and the major actions to be
          taken, including disposition methods and anticipated completion
          dates

    *    Types and amounts of exit costs recognized as liabilities
          and their income statement classification.

    *    Types and amounts of exit costs paid and charged against the
         liability

    *    Adjustments to the liability, including changes in estimates

    *    Revenues and net operating income for those exited
         activities that have separately identifiable operations.

Employee Terminations

Disclose:

    *    Amount and classification of the costs

    *    Number of people and employee groups to be terminated

    *    Actual amounts paid and actual employees terminated

    *    Any adjustments of the liability

Exit or Employee Termination Costs of an Acquired Business

Disclose:

     *    Whether you began to formulate an exit plan as of the
         acquisition date

     *    Types and amounts of exit liabilities assumed and included
          in the acquisition cost allocation

     *    Unresolved issues and the types of additional liabilities
          that may result in an adjustment of the purchase cost allocati


Common types of restructuring costs that should be separately
disclosed

Identify major types and amounts of costs included in
restructuring charges and liabilities in the financial
statements.  More complete break-out of the costs in MD&A often
is necessary for an understanding of the plan's cash requirements
and how future periods are relieved of costs expected to be
incurred.

     *    Termination payments to employees
     *    Other employee related costs
     *    Inventory write-downs
     *    Purchase commitment losses
     *    Other contract losses
     *    Warranties and product returns
     *    Leasehold termination payments
     *    Other facility exit costs
     *    Litigation and environmental clean-up costs
        
Acquired In-Process Research & Development

Disclose:

     *    Specific nature and fair value of each significant in-
          process research and development project acquired

     *    Completeness, complexity and uniqueness of the projects at
          the acquisition date

     *    Nature, timing and estimated costs of the efforts necessary
          to complete the projects, and the anticipated completion dates

     *    Risks and uncertainties associated with completing
          development on schedule, and consequences if it is not completed
          timely

     *    Appraisal method used to value projects

     *    Significant appraisal assumptions, such as -
           --  period in which material net cash inflows from
               significant projects are expected to commence;
           --  material anticipated changes from historical
               pricing, margins and expense levels; and
           --  the risk adjusted discount rate applied to the
              project's cash flows.

     *    In periods after a significant write-off, discuss the status
          of efforts to complete the projects, and the impact of any delays
          on your expected investment return, results of operations and
          financial condition

     Please use these lists only as general guidance.  Refer to
EITF 94-3, EITF 95-3, SFAS 121, APB 16, FIN 4 and Item 303 of
Regulation S-K for additional information.  Also, remember to
include a schedule of valuation and qualifying accounts meeting
the requirements of Rule 12-09 of Regulation S-X.  Additional
matters that may be relevant are cited by Lynn Turner, Chief
Accountant of the SEC, in his letter to the American Institute of
Certified Public Accountants dated October 9, 1998, which is
available at www.sec.gov/rules/othrindx.htm.




                                   Sincerely,



                                   Robert A. Bayless
                                   Chief Accountant