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Smurfit-Stone Corrects Tax Errors

The packaging company says it incorrectly accounted for $28 million.
Stephen Taub, | US
July 27, 2007

Smurfit-Stone Container says it restated results in the second quarter to correct errors in how it calculated its income taxes.

The company determined that $28 million in net benefits from income taxes previously recognized on noncash foreign currency translation losses from 2000 to 2006 should not have been recognized under FAS 109, Accounting for Income Taxes. The company, which makes paper-based packaging, explained in a regulatory filing that because it is indefinitely reinvested in the foreign operations, the losses should have been treated as permanent differences when determining taxable income.

Smurfit-Stone also said that because the errors were not material to previous financial statements, it will make revisions in future filings. The company said 2006 financial statements included in its June quarterly report will be restated for the correction of this error. Financial statements for the years ended 2003 through 2006 will be restated in the 2007 annual report.