Accounting Observer > Public Blog - Back To The Well: Countrywide Restates More

Text/HTML

The AAO Weblog

Text/HTML

If you are a registered user please log in to see more postings.

Back To The Well: Countrywide Restates More

Mar 14

Written by: Jack Ciesielski
3/14/2005 8:33 AM

This morning, Countrywide Credit Industries filed an amendment of their earlier revocation of 2004 financial statements. As you may recall from these pages, that restatement hinged on a premature recognition of gains on sales of loans and securities during 2004 quarters.

Not the end of the story. The company has gone further back into the securitization archives, and found that it must restate the June and September quarters of 2003 as well. The June quarter will see a shift of $185.7 million of pretax income into the September quarter and a decrease of $.20 in June 2003 earnings per share and a similar increase in September 2003's earnings per share. Because the erroneous sale involved loans and securities, the restated June balance sheet will have an increase in mortgage loans held for sale and notes payable of $2.9 billion.

The timing is curious, in that Countrywide should have probably suspected that other periods may have been misstated when they originally announced their problem. Perhaps they didn't want to sit on some solid information that they could share with shareholders while waiting to clear up questions about the older securitizations. Whatever the reasons, serial disclosure of problems is not a practice that enhances trust and credibility.

Trackback Print

Location: Blogs

AAO Weblog (Public)

Tags: