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KILLEARN PROPERTIES REPORTS RECENT DEVELOPMENTS

 TALLAHASSEE, Fla., Aug. 16 /PRNewswire/ -- Killearn Properties, Inc. (AMEX: KPI) today announced the following items:
 (1) On Aug. 16, the First District Court of Appeals in Florida issued their Final Order in the company's lawsuit with the Department of Community Affairs, State of Florida, regarding most of the company's undeveloped properties in Florida.
 The ruling was favorable to the company.
 In the major issue concerning whether or not the development order expired in 1986, the court reversed the ruling of the Department of Community Affairs and ruled that the company's Development Order did not expire. On a lesser issue, the court ruled against the company concerning the use of septic tanks on some properties that had been sold to and developed by other developers. The court ruled that sanitary sewer had to be extended to those units.
 (2) The company today filed a Form 8-K to notify the SEC that the company dismissed Ernst & Young, its independent accountants.
 The Ernst & Young partner responsible for the company's audit during the previous two fiscal years resigned from that firm during the course of its audit of the company's fiscal 1993 financial statements. The new partner assigned to the company's audit, within one week of assuming such responsibilities, proposed that the company eliminate the capitalization of interest on all of its undeveloped properties, effective as of May 1, 1992, the beginning of the company's 1993 fiscal year. Prior to that time, no change in the company's accounting policy had been proposed or recommended by any of the company's auditors, including Ernst & Young and its predecessor, Ernst & Ernst. The company requested that the partner be replaced. Ernst & Young would not replace the partner.
 Since its inception in 1964, the company has consistently followed an accounting policy which conforms to the requirements of FASB 34 for capitalizing interest relating to undeveloped property. None of the company's auditors for any prior fiscal year has taken exception to the company's adoption of that policy or the amount of interest to be capitalized by the company.
 The company believes that Ernst & Young's current interpretation of FASB 34 is not supported by FASB 34 and is otherwise unduly restrictive and is not consistent with the intent of the Financial Accounting Standards Board. Further, the company does not agree that its 1993 circumstances are different from prior years to justify the need for a change in its historical interest capitalization practices.
 The company has not yet engaged a new accountant to audit its financial statements for the year ended April 30, but anticipates making such engagement within the next week.
 -0- 8/16/93
 /CONTACT: J.T. Williams Jr., president and CEO of Killearn Properties, 404-389-2020/
 (KPI)


CO: Killearn Properties, Inc. ST: Florida IN: SU:

BR-RA -- AT009 -- 3295 08/16/93 17:41 EDT
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Publication:PR Newswire
Date:Aug 16, 1993
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