Kit Digital
KIT Digital Inc. to Restate Financial Statements
Learning Team A
ACC/537
May 20, 2013
Jackie Blankenship
KIT Digital Inc. to Restate Financial Statements
KIT Digital is a world-wide company that is popular among many well-known names. KIT manages video software for companies across the world and provides services to close to 2,500 clients (2012). These clients have the ability, through KIT digital, to deliver video capabilities to their consumers from any area of the world. AT&T, Volkswagen, Verizon, and Vodafone are some major associated clients that reside in over 50 countries. This major company, with offices in over 12 countries, has issued a notice to restate multiple financial statements in recent years (2012). The financial records for years ending December 31, 2009 through 2011 will be restated by KIT digital. Because of certain errors and abnormalities that were discovered, KIT will be taking precautions and restating their historical records. In addition to their yearly statements, they will also be restating each of their three quarter statements for the previously mentioned years. Consequently, KIT will also be restating their quarter financial statements for period ending March 31, 2012 and June 30, 2012. Investors are encouraged to not look to any previously issued statements for financial information or projections until corrections have been issued (2012).
Accounting Principles Involved
There are always going to be errors that occur in financial statements and when they occur the company has to decide how to go about making these changes and what accounting principles to use. There are three different approaches a company can take to report these changes. The first is to report changes currently. This records the cumulative effect in the current year’s income statement that is the difference between the new and old method. The effects of the changes made appear only in the current year’s income statement but prior years
Learning Team A
ACC/537
May 20, 2013
Jackie Blankenship
KIT Digital Inc. to Restate Financial Statements
KIT Digital is a world-wide company that is popular among many well-known names. KIT manages video software for companies across the world and provides services to close to 2,500 clients (2012). These clients have the ability, through KIT digital, to deliver video capabilities to their consumers from any area of the world. AT&T, Volkswagen, Verizon, and Vodafone are some major associated clients that reside in over 50 countries. This major company, with offices in over 12 countries, has issued a notice to restate multiple financial statements in recent years (2012). The financial records for years ending December 31, 2009 through 2011 will be restated by KIT digital. Because of certain errors and abnormalities that were discovered, KIT will be taking precautions and restating their historical records. In addition to their yearly statements, they will also be restating each of their three quarter statements for the previously mentioned years. Consequently, KIT will also be restating their quarter financial statements for period ending March 31, 2012 and June 30, 2012. Investors are encouraged to not look to any previously issued statements for financial information or projections until corrections have been issued (2012).
Accounting Principles Involved
There are always going to be errors that occur in financial statements and when they occur the company has to decide how to go about making these changes and what accounting principles to use. There are three different approaches a company can take to report these changes. The first is to report changes currently. This records the cumulative effect in the current year’s income statement that is the difference between the new and old method. The effects of the changes made appear only in the current year’s income statement but prior years
References: KIT digital, Inc. Announces Restatement of Prior Period Financial Statements and Postponement of Third Quarter 2012 Results. (2012, November 21). Marketwire, Retrieved from http://ir.kitd.com/phoenix.zhtml?c=144912&p=RssLanding&cat=news&id=1761217 Kieso, D.E., Weygandt, J.J., & Warfield, T.D. (2007). Intermediate Accounting (12th ed.). Retrieved from The University of Phoenix eBook Collection. U.S. Securities and Exchange Commission. (n.d.). Retrieved from http://www.sec.gov/Archives/edgar/data/1076700/000114420412064570/v329092_nt10-q.htm