ADC Telecommunications will restate results for its fiscal year ended October 2006 to add an impairment charge stemming from the sale of its APS France services business.
In a regulatory filing, ADC explained that in the third quarter of fiscal 2006, its board of directors approved the planned divestiture. The telecom equipment maker classified the APS France business as a “discontinued operation” in that quarter and recorded an impairment charge of $10.6 million.
This was a mistake, according to the filing. ADC states that should have included an additional $6.7 million impairment charge related to the write-off of the currency translation adjustment account balance, in accordance with EITF 01-05, Application of FASB Statement No. 52 to an Investment Being Evaluated for Impairment That Will Be Disposed Of.
The company added that it intends to file its 2006 annual report as soon as practicable.
ADC assured that the incorrect impairment charge had no impact on operating income, income from continuing operations, basic and diluted earnings per share from continuing operations, working capital or any asset or liability account, cash flow from continuing operations, or total shareowners’ investment.