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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis. All posts prior to September, 2007 are in the public domain, but after September 4, only subscribers to The Analyst's Accounting Observer will see all posts going forward. Only selected, occasional posts will be released to the public domain from September 4 forward.

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Lennox Takes Restatement Lumps
Location: BlogsAAO Weblog (Public)    
Posted by: Jack Ciesielski 2/22/2006 9:09 AM
There's Bank of America's restatement for derivatives accounting done wrong. Then there's Lennox International's restatement.

Bank of America's restatement issue centered on the misuse of the shortcut method. Lennox, while forthcoming about the dollar effects of its flawed derivatives accounting, is restating for a different reason. Here's what it said in the press release accompanying the non-reliance 8-K:

"... In connection with the completion of year-end procedures related to the accounting for futures contracts for copper and aluminum, the company determined these futures contracts did not qualify for hedge accounting under Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities”, as the company's documentation did not fully comply with the requirements set forth in the standard."

Definitely not the same thing; no shortcuts here.
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