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found on the record before us that petitioner intended most of
the amount it paid Mr. Ruf pursuant to the 1987 deferred compen-
sation arrangement to be compensation for services he provided to
petitioner during its fiscal year ended February 28, 1987, and
the balance to be compensation for services he provided during
its fiscal years ended February 29, 1988, and February 28, 1989.
If petitioner had reflected the amount it expensed pursuant to
that arrangement for the years during which he provided the
services for which petitioner intended to compensate him, rather
than entirely for its fiscal year ended February 29, 1988, its
net profit for each of its fiscal years ended February 28, 1987,
and February 28, 1989, would have decreased, and its net profit
for its fiscal year ended February 29, 1988, would have increased
by an amount correlating to the total amount of the decreases in
net profit for those other two years, thereby changing the
pattern of declining profits on which respondent relies.
Similarly, although petitioner expensed in its financial
statement for its fiscal year ended February 28, 1990, $2,600,000
of compensation it paid Mr. Ruf during that year, we have found
on the record before us that petitioner intended that amount to
be compensation to Mr. Ruf for services he provided to it during
its fiscal years ended February 29, 1988, February 28, 1989, and
February 28, 1990. If petitioner had expensed the $2,600,000 of
compensation for its fiscal years during which he provided the
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