Troy, Mich. (Dec. 11, 2002) -- Troubled retailer Kmart Corp. said it will restate results for the first two quarters of 2002 and for the three prior fiscal years to reflect errors uncovered during a review of its accounting practices and procedures.
The company said some of the adjustments related to an understatement of historical accruals for certain leases and a related understatement of rent expenses; adjustments for certain costs formerly capitalized into inventory, and the premature recording of vendor allowance transactions in fiscal 2000 and prior years. Others related to a software problem that resulted in some paid invoices from one vendor being recorded incorrectly.
The company, which filed for bankruptcy in January, launched an internal investigation into its accounting that month after receiving an anonymous letter expressing concern from someone who claimed to be an employee. The firm is also under investigation by the SEC. In March, the company said it would close 284 under-performing stores.
Kmart said the adjustments will decrease its net loss for this year by less than $100 million and will increase its net loss for the prior three fiscal years by less than $100 million. The company said the adjustments shouldn't impact its liquidity.
-- Electronic Accountant Newswire staff
