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News Article

Amkor anticipates restatement

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Amkor Technology, Inc. announced that it expects to restate its previously issued financial statements to correct errors related to accounting for stock-based compensation expense.

As previously announced, Amkor's board of directors has established a special committee to conduct a review of Amkor's historical stock option grant practices. This review, which is being assisted by independent outside legal counsel, has not yet been completed, and the special committee has not reached any preliminary or final findings.

In the course of furnishing information to the special committee, Amkor has identified a number of occasions on which the measurement date used for financial accounting and reporting purposes for option awards granted to certain Amkor employees was different from the actual grant date. Under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25") the Company should have recorded compensation expense for the difference in the values between these two dates, over their original vesting periods. In order to correct these accounting errors, Amkor expects to restate financial statements to record additional non-cash, stock-based compensation expense related to these options in fiscal years 1998 through 2005 and the first quarter of 2006.As a result, on August 15, 2006, Amkor concluded that the range of potential adjustments resulting from the Company's internal review would likely be material to the most recent financial statements and possibly to prior periods resulting in a restatement of the Company's previously issued financial statements, including those contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005, the Company's Quarterly Reports on Form 10-Q filed during 2005, and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2006.

Accordingly, these financial statements should no longer be relied upon. Amkor intends to file its restated financial statements as soon as practicable. Amkor has not completed its assessment of the amount or effect of any such adjustments. Any additional non-cash, stock-based compensation expense would have the effect of decreasing income from operations, net income, and net income per share (basic and diluted) in periods in which Amkor reported a profit, and increasing loss from operations, net loss, and net loss per share in periods in which Amkor reported a loss.

Amkor may also be required to record income tax charges associated with increased taxes arising from the adjustments and expects that expenses arising from the special committee review, the restatement and related activities will be significant. In addition to assessing the impact on its previously issued financial statements, management is assessing the impact of the restatement on the Company's internal control over financial reporting as reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and management's evaluation of the effectiveness of disclosure controls and procedures included in the annual report and the Company's Quarterly Reports on Form 10-Q for the periods affected.

If the restatement is determined to represent a material weakness, management will conclude that the Company's internal control over financial reporting was not effective as of December 31, 2005.

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