General Motors reportedly plans to restate its 2001 earnings because an accounting error led the company to overstate its profits by up to 35%.
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According to The Associated Press (AP), GM said, in a filing with the US Securities and Exchange Commission, that its 2001 earnings were overstated by approximately US$300 million to $400 million, but the final amount hasn’t been determined. GM plans to issue the restated earnings for 2001 and any subsequent years before it issues its 2005 annual report next year.
GM also reportedly said it has been conducting an internal review of credits received from suppliers, an issue also being investigated by the SEC. The review indicates GM erroneously booked the supplier credits as income in the year they were received rather than to future periods, GM said, according to AP.
The report said GM filed its statement on Wednesday evening after the US stock markets closed.
The audit committee of GM’s board has warned investors not to rely on GM’s financial statements for 2001, The Associated Press added.
