SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Just For Feet (FEET)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Walter High who wrote (223)6/2/1997 10:21:00 PM
From: Mark T. Heath   of 750
 
Both the Internal Revenue Code and GAAP (generally accepted accounting principals) have amortization requirements on intangible assets. Because I don't deal with publicly held companies within my own client base, I can not site for you the requirement that has forced FEET to amortize the new store openings, but I can find it if you are really curious. If you will recall, I mentioned the word "materiality" in my previous post. Materiality is measured at both the account level and the overall financial statement level. Since FEET has been in a growth mood for so long now, I have to believe (but have no proof of) that materiality became an issue with the independent auditors. This can be seen in the fact that the auditors forced the change and restatement of earnings. They must have believed that the costs associated with the new store openings became a significant enough amount so the the financial statements were distorted and not in compliance with GAAP by expensing all of the associated costs.

Something just dawned on me I'm sorry to say. The revision of earnings resulted in lower net income. If the company was forced to stop expensing the store openings costs and capitalize them instead, how did net income go down? Such a revision would establish an asset that would only be partially amortized in the reporting quarter; and thus increase net income, not reduce it.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News