The Walt Disney Co. filed a series of amended financial statements with the Securities and Exchange Commission last week, citing math errors related to new accounting standards that, when corrected, actually increased the company's earnings for the first half of fiscal year 2002.
According to the documents, the culprit was changes in financial accounting rules that require companies to write down goodwill amortization to reflect any permanent declines in value.
But Disney forgot to exclude goodwill amortization for its Walt Disney Internet Group, which was restructured and consolidated into the parent company last year.
"The prior year's adjusted earnings and earnings-per-share figures in this supplemental information should have excluded all goodwill amortization but, inadvertently, did not eliminate all of the goodwill charges associated with the Internet Group. As a result, the corrected supplemental earnings and earnings-per-share figures for the prior year are better than those originally filed," Disney said in the filing.
For example, Disney's initial filing said the company recorded a loss of $449 million, or 21 cents per share, in its fiscal second quarter ended March 31. That should have been a loss of $389 million (19 cents).
For the first half of the fiscal year, Disney initially recorded a loss of $9 million, which should have been a gain of $176 million, or 8 cents per share.