Restatement Of Accounting Error By Overstock.Com

Restatement of method of business relationship Error by overstock.com On Friday 30, 2009 Overstock come with inform in the fourth get out can boodle by the year ended 2008 of $1 j disasterion dollars correspond to the chief executive officer Patrick Byrne. The compevery has been violating the principles according to GAAP in ill luck to restate the introductory statements affected to dress account actus reuss and repetition the disclosures in the financial statements of subsequent periods (Kieso, Weygandt & Warfield, 2007). This error reflected an blowup of sugar alternatively the actual position by the beau monde it was a net loss of $.8 million. According to Statement of monetary accounting system Standard Board (SFAS 154) and the SEC Staff Accounting publicize (SAB 99) the Company must contract restate any earlier periods, instead than use a “one-time catch” to correct its accounting errors relating to payments from partner under-billed earlie r in the year (Overstock.com and CEO Patrick Byrne attack Accounting Rules in Q4 2008 Financial Report. (2009). During the fourth rear end of 2008, Overstock.com reported a gross profit of $43.6 million and the one-time gain of $1.8 million relating to payments from partner. The extraordinary gain of $1.8 million was an accounting error by improper one-time cumulative adjustment.

According to SFAS 154 on paragraph 25, says that “any error in the financial statements discovered in prior period should be adjusted by restating the prior-period financial statement.” In other words after restating the one-t ime gain of earnings, the caller should hav! e reported a net loss of $800,000 instead of a $1 million of profit previously reported. This pith that net income in Q4 of 2008 of the Income Statement was overstated by the tot of $1.8 millions referable by a material error do by the CEO and the Accounting Staff in the community in trying to hide the losses. According to SAB 99, Materiality (Jonathan G. Katz, 2009), Overstock Co. met the triplet materiality criteria in which...If you want to get a fully essay, order it on our website: OrderCustomPaper.com

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