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Toshiba Profit Markdown May Double Estimates

Toshiba Profit Markdown May Double EstimatesToshiba Profit Markdown May Double Estimates

Toshiba Corp. is likely to mark down its past operating profit by at least ¥100 billion ($814 million)–almost double its earlier estimated restatement—as a result of accounting irregularities, a person familiar with the matter said.

In a case shaping up to be one of corporate Japan’s biggest debacles since a scandal at Olympus Corp. in 2011, a Toshiba-appointed independent panel has been investigating the infrastructure giant’s finances after Japan’s financial watchdog warned of possible accounting irregularities in February, Bloomberg reported.

The company said in May it would need to reduce its profit for the 2009 through 2013 fiscal years by ¥54.8 billion because of improper accounting of project costs, mostly in its electric power systems business.

Since then, Toshiba and the independent panel also discovered problems at its personal computer and semiconductor businesses, the person said, forcing the company to prepare for another significant earnings restatement. Toshiba had earlier touched on the existence of problems at these units, but didn’t reveal the scale of their financial impact.

Japanese media reported Toshiba’s plan for further profit markdown Saturday. The company responded with a statement saying it had no new specific figure to announce at this point.

The independent panel is expected to report its findings by mid-July. Chief executive Hisao Tanaka has hinted there will be a major management reshuffle at that time.

As a result of the accounting problems, Toshiba hasn’t been able to report its earnings for the 12-month period ending March 31—an announcement originally scheduled for June. The company hopes to file the earnings by the end of August.

 

Financialtribune.com