Problem
Ultratech failed to accurately account for the impairment of goodwill on its financial statements. Many investors were misled about the financial well being of the company due to the improper treatment of goodwill.
Decision
Ultratech should have accurately presented the financial position of their company using GAAP guidelines.
Analysis
Ultratech used pro forma presentation in their financial statements in order to show positive earnings. Since pro forma statements are not regulated by GAAP, companies can exclude items which they feel do not give an accurate portrayal of their financial performance. Ultratech used this form of financial statement presentation from 1999 to 2001 in order to show their "underlying operating performance."
By not recognizing acquisition related expenses Ultratech was able to report positive earnings for the period ending June 30, 1999. Ultratech would have actually recognized a loss for that period if the financial......
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Approximate Pages: 2 (260 words per double-spaced page) |