Leap Wireless International has begun to restate more than three years’ worth of financials to adjust accounting mistakes. The projected $40 million adjustment will make up for errors made in revenue recognition and classification of its equipment revenue.

Currently without a full-time CFO, the wireless-communications company has not yet calculated how net income for the periods affected will change, based on tax expenses.

Leap announced Friday that the impending restatement was deemed necessary following an internal review of its service revenue activity and forecasting process. The review began in September, which was the beginning of a difficult season for the company.

During the first week of September, CFO Amin Khalifa resigned after just over a year in his post to pursue other interests. CEO Doug Hutcheson has been filling in as Leap’s finance chief since then. In addition, the company had received an unsolicited takeover proposal from MetroPCS Communications; that offer has been dropped, but dealing with the prospect cost the company about $4 million.

In its restatement announcement, Leap said the changes necessary for 2004, 2005, 2006, and two of this year’s quarters “are not attributable to any misconduct by company employees.” The San Diego company predicts that in the end, it will have reduced approximately $20 million in service revenue and $20 million in operating income for the affected financial statements.

Leap attributes one of its problems to the timing and recognition of some of its service revenues and operating expenses. For example, the company had “mistakenly” recorded approximately one month of deferred revenue for customers who had disconnected their service. One of its timing errors had to do with the reconciliation of its billing system data with pay from overdue customers, resulting in overstated revenue since 2004.

Another change Leap will have to make is to reclassify some of its revenues and costs on a gross basis. The company had been offsetting approximately $120 million of revenue from equipment sales against the cost of equipment on a net basis.

Leap cautions that its projections may change because its audit firm has not reviewed its restated financial statements. The company also warns that the restatements could result in a default of its credit agreements with Bank of America and its lenders. The company has about $890 million in borrowed debt.