Electronic Data Systems postponed for the second time the release of its third quarter earnings pending an evaluation by the company and its auditor of an asset impairment related to its Navy Marine Corps Intranet account.
EDS said that the evaluation covers the timing and amount of the write-down.
The company also noted that its auditor, KPMG, brought to the attention of the audit committee certain issues related to quarterly bonus plan accruals in 2003 and 2004. While it said that the resolution of those issues could result in revisions to its quarterly financial statements within 2003, EDS doesn't believe the issues will affect its reported financial results for that full year.
At the recommendation of KPMG, the audit committee began an investigation of the quarterly bonus plan accruals and other adjustments proposed by EDS for the closing of its books for the third quarter of 2004.
"While EDS is unable to predict the outcome of this work or when it will be completed, it does not expect a material adverse effect on its financial results or its credit facilities or debt instruments," the company said this week.
KPMG won't be able to complete its interim review of EDS' financial statements for the quarter ended Sept. 30 until the audit committee work is completed. The company said that it believes the accounting issues will be resolved "expeditiously without impact to its business" and reaffirmed its earlier preliminary third quarter guidance and full year guidance.
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