Kroger Co., the largest supermarket company in the country, will restate its earnings for the past three years for errors in accounting of deferred taxes.
The restatements will cut Kroger's 2004 fiscal year earnings by $4 million, and cut the company's 2003 fiscal year earnings by $27 million. Kroger announced the restatement i n a regulatory filing with the Securities and Exchange Commission.
According to Kroger, the restatement is due to differences between the income tax basis and the financial reporting basis of certain assets and liabilities related to acquisitions and the related effect on recorded goodwill. The company said that it had first identified deficiencies in its deferred tax account balances while assessing its internal controls in 2004.
Kroger said that the errors would correspondingly impact its goodwill impairment expenses, the excess purchase price above fair market value of net assets, for the same years. Kroger's goodwill charge for 2004 will increase $4 million, to $904 million, and its expenses for 2003 will be raised $27 million, to $471 million.
The company also said that it would report a decrease in deferred income tax liabilities of $79 million, an increase in goodwill of $31 million, and an increase in shareowners' equity of $110 million as of the start of its 2002 fiscal year.
A year ago, Kroger restated its results back to 2001 after finding it had improperly accounted for property leases, reducing earnings by $26 million.
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