Burlington Coat Factory Announces Restatement of Financial Statements for Lease Accounting and Related Depreciation/Amortization.BURLINGTON, N.J. -- Burlington Coat Factory Burlington Coat Factory Warehouse Corporation is a national department store retailer focusing on clothing and shoes, with over 360 stores in 42 states (as of 2006). In early 2007, the first location to be opened in Canada will be at the Vaughan Mills mall in Toronto. Warehouse Corporation (NYSE NYSE See: New York Stock Exchange :BCF BCF Billion Cubic Feet BCF Bioconcentration Factor BCF British Chess Federation BCF British Coatings Federation BCF Breast Cancer Fund BCF Bank Credit Facility BCF Bulked Continuous Filament BCF British Cycling Federation BCF Boeing Converted Freighter ) announced today that it has reviewed its lease accounting practices as a result of a letter issued by the Chief Accountant of the Securities and Exchange Commission (SEC) to the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. on February 7, 2005 regarding certain operating lease Operating Lease A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset. Notes: An operating lease is not capitalized it is accounted for as a rental expense. accounting matters. Based on this review and discussions that the Company had with its Audit Committee and its independent registered public accounting firm, the Company will revise its method of accounting for operating leases to conform with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting as noted in the SEC's letter. The Company will amend the appropriate filings with the SEC to restate affected portions of its financial statements for each of the fiscal years 2002 through 2004, and for the first two quarters of fiscal year 2005. Accounting for Certain Operating Leases Historically, when accounting for leases with renewal options, the Company recorded rent expense on a straight-line basis over the fixed initial term, with the term commencing when rental payments actually began, and computed depreciation/amortization on the related leasehold improvements and other long-lived assets located on these properties over their useful lives. The Company will revise its accounting to recognize rent expense on a straight-line basis over the expected lease term, including rent holidays and option periods where exercise of such option periods can be reasonably assured. In addition, the commencement date of the lease term will be the earlier of the date on which the Company becomes legally obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. for rental payments or the date on which the Company takes possession of the property. The resulting adjustments will not affect historical or future cash flows or timing of payments under pertinent leases. The Company will also revise its accounting for lease incentives. Previously, lease incentives received from the lessor for the reimbursement of costs of leasehold improvements were netted against the incurred capital expenditures. The Company will revise its accounting for these lease incentives by recording them as deferred rent and amortizing them over the lease term. The Company previously believed that its audited financial statements, which reflected longstanding lease accounting treatments, were appropriate under generally accepted accounting principles. The Company will file with the SEC amendments to its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended May 29, 2004 and to each of its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. for the first and second quarters of fiscal 2005 to reflect the restated financial statements. As the preparation and filing of these amendments will precede the filing of its Quarterly Report on Form 10-Q for the third quarter of fiscal year 2005, the Company expects to file with the SEC a notification of late filing, extending the time to file its Form 10-Q until April 12, 2005. Upon filing on or before April 12, 2005, the Company's Form 10-Q will be deemed to be timely filed. Cautionary Statement Regarding Forward-Looking Information Statements made in this press release that are forward-looking (within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995) are not historical facts and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: management's expectations regarding the restatement of the Company's historical financial statements, future financial performance, the effects of regulation and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , and other factors that may be described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied will not be realized. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion