Music and video distributor Handleman Co. has restated its financials for the past three years to reflect a change in its accounting method for stock options.
The company announced that in accordance with FIN 44, it will record compensation expense based upon the excess of the market price over the option price through the date the stock options are exercised, for all stock options granted prior to fiscal 2004.
As a result of the change in accounting method, the company reduced fiscal 2004 net income by about 10 percent, from $38.8 million to $35.8 million. For fiscal 2003, it pared earnings from $27.7 million to $24.9 million, and for fiscal 2002, from $36.9 million to $35.0 million.
Handleman also said it will increase shareholders equity by $1.4 million.