10:51 AM EST, 11/22/2024 (MT Newswires) -- United Parcel Service ( UPS ) will pay $45 million to the US Securities and Exchange Commission to settle charges it failed to follow generally accepted accounting principles in valuing its former UPS Freight subsidiary prior to the prospective sale of the specialty shipper in 2019.

According to the SEC, the company had determined UPS Freight would likely sell for no more than about $650 million, and under GAAP rules, should have used that price to calculate whether it needed to write-down the nearly $500 million of goodwill assigned to its balance sheet.

Instead, the SEC contends that UPS used a much higher valuation for UPS Freight made by an outside consultant, allowing the company to report earnings and other financial metrics that were materially better than they otherwise would have been had UPS used the correct valuation.

In a statement to MT Newswires on Friday, a UPS spokesman said the company did not admit or deny the SEC allegations in accepting the settlement offer.

"The settlement amount had previously been fully accrued in our financial statements and the settlement will not have a material effect on our business, financial condition, results of operation or liquidity," the spokesman said, adding the investigation is concluded with respect to the company.

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