Goodyear to Resolve Accounting Issue

Goodyear is to resolve some of its financial issues by working with South Pacific Tyres Australia to reach an agreement on how to account for $8 million through a supply deal between both companies.

According to news source Forbes, the tyre manufacturer is attempting to have this supply deal aligned under US accounting principles. The financial statements for South Pacific Tyres are prepared under Australian accounting principles, and then adjusted for use in the United States. These disclosures are required before Goodyear can file its amended annual report for 2003 with the Securities and Exchange Commission.

“Depending on the resolution of the question, this issue may have no impact on Goodyear’s previously reported financial results, or it may result in the company recognising up to the entire amount as a pretax expense in 2000 rather than amortising it over 10 years, the treatment Goodyear has been applying,” said the company in a statement. The supply deal between the two companies is for 10 years.

Goodyear said it is also possible that other items having an impact on its profit or loss for prior periods might be identified during its review of South Pacific Tyre’s financial statements.