Goodyear tries to finalize financials with Australian partner
Goodyear Tire & Rubber Co. is working with its partner in South Pacific Tyres (SPT) Australia to reach agreement on the proper treatment of a transaction under United States generally accepted accounting principles (U.S. GAAP).
As previously disclosed, Goodyear plans to incorporate additional disclosure related to certain overseas affiliates, including SPT, in its financial statements. These additional disclosures are required before Goodyear can file an amended Annual Report on Form 10-K for 2003. The accounting issue in Australia arose in the course of preparing these additional disclosures.
The financial statements for SPT are prepared under Australian accounting principles and then adjusted to U.S. GAAP for use in Goodyear´s consolidated financial statements.
Goodyear says the amount in question is presently estimated at about $8 million and relates to the accounting treatment of a 10-year supply agreement between Goodyear and SPT. Depending on the resolution of the question, this issue may have no impact on Goodyear´s previously reported financial results, or it may result in the company recognizing up to the entire amount as a pre-tax expense in 2000 rather than amortizing it over 10 years, the treatment Goodyear has been applying.
It also is possible that other items having an impact on Goodyear´s profit or loss for prior periods will be identified in the course of the review of SPT´s financial statements.
Separately, Goodyear´s Australian partner in SPT has informed the U.S. Securities and Exchange Commission that its report on Form 20-F will be delayed for the same reason.
Goodyear says it cannot predict when it will be able to file its amended 2003 Form 10-K or whether the filing of its 2004 10-K will be delayed as a result of this issue.
Goodyear´s stock was selling at $14.89 a share at the close of the New York Stock Exchange on Thursday, Dec. 30. That compares to a 52-week high and low of $$15.01 and $7.07, respectively.