Meredith Corporation & Subsidiaries - Page 13

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               In Meredith I, we reasoned that contingent acquisition costs           
          incurred through TYE 1991 were to be added to the cost basis of             
          the subscriber relationships when they became fixed, and we held            
          only that those costs attributable to Meredith's TYE 1986 and TYE           
          1987 were amortizable over whatever remained of the 42-month                
          useful life ending June 30, 1989.  We did not address the                   
          deductibility of editorial costs incurred in any year after TYE             
          1987 because such years were not before the Court.                          
          III. Contingent Acquisition Costs Attributable to Fully Amortized           
          Assets Are Deductible as Incurred                                           
               Furthermore, the expiration in mid-1989 of the useful life             
          of the subscriber relationships does not foreclose a deduction              
          for those editorial costs incurred by Meredith during subsequent            
          taxable years.  General tax law principles enounced in                      
          regulations and case law provide that contingent asset                      
          acquisition costs that become fixed after the relevant asset is             
          fully amortized are deductible as they are incurred.                        
               Section 1.338(b)-3T, Temporary Income Tax Regs., 51 Fed.               
          Reg. 3592 (Jan. 29, 1986), as adopted in T.D. 8072, 1986-1 C.B.             
          111, concerns the treatment of adjustments to adjusted grossed-up           
          basis (AGUB) for contingent events that occur after the close of            
          a new target's first taxable year in certain stock acquisitions.            
          If an acquisition date asset has been disposed of, or fully                 
          depreciated, amortized, or depleted before a contingent amount is           
          taken into account in determining AGUB, the contingent amount               

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