Shares in Royal Ahold have taken another hit as the Dutch retailer said it estimated an additional US$29m reduction of pre-tax earnings as a result of internal investigations into accounting irregularities at its US operations.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Ahold announced that internal forensic accounting investigations at 14 of its operating and joint venture companies were substantially complete and expected the investigations at the remaining three units to be completed within the next two weeks.
Based on the information received to date, Ahold said intentional accounting irregularities involving earnings management and misapplications of generally accepted accounting principles were found, principally at its US Tops Markets subsidiary. The amount of these accounting irregularities is approximately $29m, which will require adjustments to reduce Ahold’s pre-tax earnings.
The adjustments referred to above exclude those required by the US$880m overstatement of pre-tax earnings at U.S. Foodservice, adjustments that may be required at Disco with respect to the investigation underway there, and adjustments due to Ahold’s decision to consolidate its joint ventures on the equity method.
The separate internal investigation at Disco in Argentina is expected to be completed shortly.
Once all the investigations are completed, the company intends to review all findings with the audit committee to determine the necessary accounting adjustments. Ahold will also determine what steps must be taken to strengthen internal controls, to eliminate any improper accounting practices and to take whatever remedial actions are deemed necessary.
The retailer also announced that its syndicate of banks has agreed to extend the deadlines for the provision of audited 2002 financial statements for Stop & Shop from 31 May to 30 June and audited 2002 consolidated financial statements for Ahold from 30 June to 15 August. The company said that Albert Heijn audited 2002 financial statements are to be provided no later than 2 June.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
