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Accounting obscurities mean US settlement with Bank of America might not cost bank $17 billion

  • 533cbd1a014f7410VgnVCM200000d6c1a8c0____-Bank of America How Painful-1.jpg

    FILE - This, Oct. 14, 2012, file photo shows a Bank of America branch in downtown Miami. How much will Bank of America’s expected $17 billion mortgage settlement cost the company? The answer is, almost certainly not $17 billion. In mega-settlements negotiated with the U.S. government, a dollar is rarely worth an actual dollar. Inflated figures make sensational headlines for the Justice Department, and $17 billion would be the largest settlement by far arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. But the true cost to companies is often obscured by opaque accounting techniques. (AP Photo/Lynne Sladky, File ) (The Associated Press)

  • a260585eaf1159205d0f6a7067005bb6.jpg

    FILE - This July 16, 2013, file photo shows a Bank of America branch on Peachtree Street, in Atlanta. How much will Bank of America’s expected $17 billion mortgage settlement cost the company? The answer is, almost certainly not $17 billion. In mega-settlements negotiated with the U.S. government, a dollar is rarely worth an actual dollar. Inflated figures make sensational headlines for the Justice Department, and $17 billion would be the largest settlement by far arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. But the true cost to companies is often obscured by opaque accounting techniques. (AP Photo/David Goldman, File) (The Associated Press)

The Justice Department's $17 billion settlement with Bank of America almost certainly will not cost the company that much.

Inflated figures in mega-settlements negotiated with the government make for sensational headlines. But the true cost to companies is often obscured by potential tax deductions and opaque accounting techniques.

A person familiar with the settlement tells The Associated Press that Bank of America will pay roughly $10 billion in cash and provide aid valued by the government at $7 billion.

The person spoke on condition of anonymity because the deal had not yet been announced.

It's a bit of a numbers game. Cash payments can be treated as tax-deductible business expenses. And consumer relief is a vague cost category that can include simply following business as usual.