AOL Time Warner is expected to write off several billion dollars on top of the record $54 billion charge it took last year.
The world's largest media company said in October it would probably take a "substantial" non-cash goodwill impairment charge in the fourth quarter to reflect the reduced value of its America Online unit since its 2001 merger with Time Warner.
Although AOL Time Warner executives have said debt covenants would not be affected by the charge, accounting experts say such charges can hurt a company's debt rating as well as its ability to borrow.
Media veterans said the looming charge was a reminder that merging America Online and Time Warner was a bad idea. The stock price is down 70 per cent since the deal was completed.
The AOL unit, once called the crown jewel of the combined company, has struggled with a sharp slowdown in advertising spending and subscriber growth. A new management team cut financial targets again last month.