If Jones Apparel Group's $810 million noncash writedown for goodwill and trademarks is any guide, accountants might exact an even bigger toll on fourth-quarter profits than stingy consumers.

Jones said Thursday that the aftertax charge, related mostly to its acquisitions of Nine West and Maxwell Shoe Co., and retail weakness would result in losses of $10.07 to $10.11 a share for the quarter, down from losses of $1.01 a year ago.

And Jones isn't alone. Fashion companies of all stripes could post far steeper losses than weak sales would dictate as they write down goodwill. Simply put, goodwill is the valuation placed on assets from acquisitions and needs to be adjusted on a regular basis to keep market capitalization and shareholders’ equity in relative balance.

While it often doesn't reflect the true health of a company, it's important because it can have a major impact on loan terms and other fiscal instruments.

Possible writedowns ahead for some, including Macy's Inc. and Sears Holdings Corp., could reach into the billions of dollars. For example, Sears has goodwill of $1.66 billion; Liz Claiborne Inc., $676.8 million; Oxford Industries Inc., $248.6 million; Casual Male Retail Group Inc., $63.1 million; Destination Maternity Corp., $50.4 million, and Hartmarx Corp., $38.8 million.

Firms are required to evaluate the goodwill on their books annually. And even if it's not time for their scheduled review, many companies might decide to take a second look this quarter given accounting rules that could view the economic downturn as a triggering event, said Steve Barr, spokesman at auditor PricewaterhouseCoopers.

"It's reasonable to expect that, given the current economic environment, we will see companies evaluating goodwill impairments," he said.

For many, it will amount to an accounting insult after financial injury caused by the recession.

Even without the charge, Jones said 2008 earnings would be less than previously projected. The company also took steps to save about $33 million annually and reduced its quarterly dividend to 5 cents a share from 14 cents. Without going into specifics, the company said it would cut staff and eliminate unprofitable divisions.

"While our previous guidance considered the difficult retail environment prevailing at that time, conditions significantly worsened as the quarter ended," said Wesley Card, president and chief executive officer. "The resulting increase in promotional activity by our customers and in our own retail operations impacted our results."

Without the charge, Jones said adjusted fourth-quarter losses from continuing operations would range from 3 to 6 cents, where analysts were looking for a loss of a penny. Adjusted earnings for the year are slated for 85 to 88 cents a share, down from the 93 to 98 cents the company previously projected.

The firm also cut its planned capital spending to $45 million this year from about $70 million in 2008. At the end of the year, Jones had approximately $335 million in cash on hand.

The company declined to elaborate.

Investors pushed shares of the firm down 48 cents, or 11.8 percent, to $3.60 on Thursday.

Jones' flagging stock price—the issue is down 83.7 percent from its 52-week high of $22.12, reached on Sept. 8—is partially to blame for the quarter's charge.

"As a result of the extremely challenging market conditions and the resulting decline in our stock price, we were required under the accounting rules to record noncash goodwill and trademark impairment charges in the fourth quarter," said John McClain, chief financial officer.

Many other companies could get caught in the same vise and opt to write down goodwill, a balance sheet stand-in for intangible assets such as brand names and business reputations that were picked up through acquisitions.

How pressing such write-offs are is an open question.

"While this is important, it’s not a cash charge—it's an accounting charge," said David Botwinick, managing director at MHM Mahoney Cohen, CPAs, speaking generally. "It's all on paper. What it means is interpreted by the person it"s important to."