Accounting & Tax

Eddie Bauer: No Restatement Needed

A shareholder vote on selling the company, to buyout firms Sun Capital Partners and Golden Gate Capital for $286 million, has been rescheduled for ...
Stephen TaubFebruary 1, 2007

Eddie Bauer Holdings announced that following a review with its independent auditor, BDO Seidman, the retailer won’t restate prior results as a result of previously disclosed tax accounting errors.

Last week, Eddie Bauer disclosed that it had identified errors for 2005 and prior years.

The retailer also postponed a meeting at which shareholders were scheduled to vote on selling the company to buyout firms Sun Capital Partners and Golden Gate Capital for $286 million. Eddie Bauer added that it has rescheduled the shareholder vote for February 8.

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The company elaborated that its accounting for income taxes did not properly reconcile the book and tax depreciation on its property and equipment related primarily to the treatment of tenant improvement allowances granted in connection with the opening of new retail stores.

As a result, the company recorded an incorrect amount of deferred tax assets. The correction will be reported in the 2006 financial statements and will result in a $12 million decrease to net deferred tax assets and a $12 million increase to goodwill.

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