Tax

Smoke Signal: Alliance One Finds Tax Errors

Tobacco merchant Alliance One International will restate because of income tax errors, which it says constitute a weakness in the company's interna...
Stephen TaubJune 12, 2007

Alliance One International, Inc. said it will restate its results by $8.7 million for the three quarterly periods ended December 31, 2006 after it discovered errors related to income taxes.

The tobacco merchant stressed that there will be no impact on the actual cash payments of income taxes, but warned that the errors constitute a material weakness or weaknesses in the company’s internal controls over financial reporting as defined by the Public Company Accounting Oversight Board. The company did not provide further explanation.

According to a regulatory filing, a deferred income tax expense was not recognized as a result of the write-off of certain related assets for financial statement reporting purposes. In addition, a deferred income tax expense was not recognized on an unrealized foreign exchange gain that is taxable in a future period for statutory tax purposes. The company also said that a valuation allowance was not reversed to reflect the utilization of the related net operating losses.

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Alliance One also noted that other income tax related adjustments that are not material, individually and in the aggregate, will be included in the restated condensed consolidated financial statements.

Alliance One last made financial news when it requested a filing extension for the quarter ending June 30, 2005. At the time, the company was working to consolidate the financials and integrate the administrative and financial transactions of Standard Commercial Corp., which it acquired on May 13, 2005.

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