The Audit Is In

March 12, 2002

Homestore Announces Completion Of Internal Inquiry

Inman News Features

Homestore announced today that in 2000 it improperly recorded $36.4 million in revenue as "independent cash transactions" when it should have been considered trade-outs or barters with other companies that did business with the online real estate company.

Without any way to "establish the fair value of these barter exchanges," the related revenue has been reversed, according to the announcement released after the markets had closed.

The company also said "certain software products, previously recorded as revenue in 2000, did not meet all revenue recognition requirements and, accordingly, $5.0 million of revenue should have been deferred at December 31, 2000."

The misbooked revenue totaled $41.4 million, which was within the company's originally announced range of approximately $39 million to $45 million.

The company completed its internal accounting inquiry and has filed its audited restated financial results for the year ended December 31, 2000.

Copyright: Inman News Service

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