Question

In Chapter 8, we learned the rules and regulations surrounding the recognition and measurement of revenue reporting.  In the past several years there have been dozens of companies forced to restate their reported revenue.  For this discussion question you will research one of those companies and tell us who the company is, why did they have to restate, and how much was the restatement.  Please include the URL where you found your information.  The restatement must have been in the last 5 years.

Answer 1

Restatement is an act of revising of companies previous year’s financial statements to correct an error. This is essential when there is material mistake due to incorrect account, misrepresentation, fraud and non compliance of General Accepted Accounting Principles.

Real Case: Molson Coors Brewing Company

Molson Coors Brewing Company is world’s largest brewing , a multinational company formed in 2005 year by merging two companies i.e. Molson Canada, and Coors of United States. During February 2019, it disclosed that, Financial Statements of the company has to restate for the financial years of 2016 and 2017, as auditors have discovered accounting mistakes for incomes taxes in relation to Deferred Tax liabilities determination. Company understated the Deferred Tax liabilities and income tax expense which lead to enhance the profit $400 million approximately in 2016 year. In overall position company stated that, it overstated its total equity by $248million, on the other hand understated the amount of taxes owed but not yet paid with same amount.

https://www.investopedia.com/terms/r/restatement.asp