Which of the following statements relating to restructuring charges is false?

A. Restructuring charges usually consist of a write-off component and an accrual component.
B. The restructuring charge is usually properly considered to be a current period expense.
C. Over-estimation of severance accrual can lead to reversals in subsequent years and a consequent increase in profitability.
D. Severance accrual results in a current period expense even though severance payments have not been made in the year of the charge.

Correct Answer: B

The write-off portion of the restructuring expense arguably relates to prior period and should be allocated as such by the analyst. The accrual of severance can also be viewed as an "investment" to be capitalized and amortized over the periods expected to benefit from the severances.