| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers D > Headlines for Delphi Corp. > News item |
Delphi seeks SEC opinion on best treatment of hedge designation issue
By Caroline Salls
Pittsburgh, Dec. 19 - Delphi Corp. asked the office of the chief accountant of the Securities and Exchange Commission for an opinion on the most appropriate accounting treatment for a potential hedge designation issue identified in an audit, according to an 8-K filing with the Securities and Exchange Commission.
Once the SEC has responded to Delphi's request, the company will be able to complete its analysis and determine whether a restatement of its previously issued financial statements is required.
As previously reported, in connection with the audit of Delphi's 2006 consolidated financial statements and performing related interim procedures for the third quarter, independent auditors Ernst & Young LLP identified a potential issue with the designation of hedges related to foreign currency in the middle of October.
Specifically, the auditors said the hedge designation for foreign currency forward contracts it had entered into to hedge exposure to foreign currency fluctuations may not have satisfied the technical accounting rules under Statement of Financial Accounting Standards No. 133 to qualify for exemption from the more strict effectiveness testing requirements.
If the contracts do not qualify for hedge accounting treatment under FAS 133, Delphi would be required to recognize all changes in fair value through the income statement as periodic items.
The filing said no impact is expected on previously reported cash flow.
Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.