Accounting & Tax

Novell Discloses Options Errors

Incorrect measurement dates may have been applied for nearly a decade.
Stephen TaubApril 20, 2007

In a regulatory filing, Novell disclosed it utilized incorrect measurement dates for some stock-based compensation awards granted from November 1, 1996, through September 12, 2006. As a result of its independent investigation, the business-software maker will revise the measurement dates for these awards for financial accounting and reporting purposes and recognize additional stock-based compensation expense.

Novell has not yet determined the exact amount of the compensation charges, their tax and accounting impact, or their effect on the company’s previously issued financial statements. The company stressed, however, that its investigation, which is now substantially complete, did not identify any intentional wrongdoing by former or current Novell employees, officers, or directors.

Novell also noted that because of the review, it previously delayed the filing of reports for the fiscal quarters ended July 31, 2006, and January 31, 2007, as well as its annual report for the fiscal year ended October 31, 2006.

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