But not exactly irrelevant, either.
For anyone who’s ever felt put off when you ask an accounting question on a conference call or at an analysts’ meeting, here’s a story for you by Herb Greenberg of crypto Custodian about the “open mike” on a Nova Star conference call.
It’s kind of like the urban legend of the kiddie show host, who didn’t realize the mike was still on after broadcasting the show. He’s reputed to have muttered something like “That oughtta hold the little b******s.”
Change the audience, change the epithet. But it’s the same old foot in the mouth.
BRE Properties’ Liabilities
BRE Properties issued a non-reliance on prior financials kind of 8-K yesterday. Reason: improperly accrued liabilities. It didn’t give amounts of misstatements, but mentioned that they were immaterial for each of the periods being restated (annual reports for years 2000 through 2003; quarterlies for all of 2004 reported through September). And it didn’t really say which direction the misstatement of accrued liabilities went. (Overstated? Understated? Can’t tell.)
What the firm did say, however, was that its internal control review led them to realize that the “cumulative effect of the errors caused by our historical practice of evaluating accrued liabilities was growing in magnitude.”
The area of accrued liabilities – things like self-insurance reserves, litigation reserves, workmen’s comp reserves, and the like – is starting to pop up more frequently as a reporting re-do. The disclosure requirement in these areas is just plain lousy. Which leads you to wonder: if firms had to better disclose the activity in these potential cookie jars, would they be more thoughtful about the accounting in the first place?
Chairman Donaldson’s Interview
SEC Chairman Bill Donaldson held an interview session yesterday; the Wall Street Journal’s account is here, and the New York …