Accounting & Tax

Private Co. Restates Seven Years of Earnings

Land O' Lakes will restate seven years of net income to account for faulty recording of milk payables and receivables.
Stephen TaubJune 30, 2004

Restatements are not restricted to public companies. Land O’Lakes, a farmer-owned cooperative, has announced that it will restate the net income it earned from 1997 through March 2004 by about $19 million.

The co-op, which reports sales of over $6 billion, says the purpose of the restatement is to make accounting adjustments that mainly concern missteps in the recording of estimates of milk payables and receivables and at its Carlisle, Pa. facility.

The Arden Hills, Minn. company said its auditor, KPMG, would re-audit the restated results. Land O’Lakes audit committee is also investigating the circumstances surrounding the adjustments and the internal controls designed to prevent them.

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The company has brought in new personnel to be responsible for the accounting at the Carlisle facility and has implemented accounting processes, which are utilized elsewhere in the company’s dairy foods operations, to account for milk receivables and payables.