February 22, 2002
Homestore Issues New Estimates Of Financial Restatements
Inman News Features
Homestore today provided Nasdaq additional information about its pending financial restatements, including the $76 million overstatement of online revenue last year.
The company announced on Feb. 13 that it would restate its financial results for the year ended Dec. 31, 2000. Based on the results of the inquiry to date, the company has determined that its restated results will reduce its total revenue in the year ended Dec. 31, 2000, by $39 million to $45 million.
The company announced on Jan. 2 that its online advertising revenue for the first three quarters of 2001 was overstated by $54 million to $95 million and that its audit committee's internal inquiry could result in additional restatements.
The company has determined that online advertising revenue for the period was overstated by $76 million to $82 million, and that non-advertising revenue for the period was overstated by $28 million to $31 million.
According to Homestore, approximately $7 million to $23 million of this non-advertising revenue, consisting principally of software and services, will be recorded as deferred revenue at Sept. 30, 2001 and may be recognized as revenue in future periods. The company determined it had not met all of the conditions required to recognize this revenue in the first three quarters of 2001.
The company announced on Dec. 21, 2001 that the audit committee of its board of directors had begun an inquiry into certain of the company's historical accounting practices. The company said it is committed to completing an inquiry of these matters and expects to complete the inquiry and file restated financial statements by mid-March.
Copyright: Inman News Service