Disney Amends SEC Filings, Citing Math Error

Walt Disney Co. on Friday amended filings with the Securities and Exchange Commission to correct a math error linked to new accounting rules.

Disney said the error does not change its bottom line or cash flow.

The entertainment giant said the amended filings were only to correct a line item in its last two income statements in which year-earlier earnings were stated to exclude the effect of a new accounting rule, FAS 142. The rule requires companies to write down their goodwill assets to reflect any permanent declines in value.

The error occurred because Disney mistakenly included goodwill charges from its Internet Group that should have been excluded. As a result, its adjusted earnings last year were lower than they should have been.

Instead of showing a loss of $9 million before the effect of the accounting rule in the six months ended March 31, 2001, Disney said it should have reported a gain of $176 million during that period.

Chief Financial Officer Tom Staggs said the error was discovered this week. “As soon as we knew there was an error, we moved quickly to make sure that we corrected it,” Staggs said. “I take responsibility for these financials and will continue to do so.... I’m convinced that we’re accurate in reporting all of our financials.”