The accounting in question pertains to income taxes and foreign exchange rates on what CSC called certain intracompany accounts. In a statement Monday, the company said that correcting the income tax component could result in a charge of about $200m over the 10 years, but that fixing the forex errors might yield a material cumulative gain, the extent of which is still unknown.
Once its review of the matter is complete and it submits an updated annual report, CSC plans to file its results for its first fiscal quarter through June 39, 2007. The company had previously planned to post these numbers in August, but it delayed the announcement, also citing uncertainties over income taxes. But CSC did reaffirm its earlier Q1 guidance of revenue between $3.7bn and $3.8bn, plus EPS of $0.65 to $0.75 before and accounting expenses and other special charges.
CSC in May announced that separate accounting issues relating to tax liabilities between 200 and 2006 would result in charges between $300m and $400m, but those charges have now been pushed through and accounted for in CSC’s filings, said Mike Dickerson, the company’s director of media relations. These newly announced charges are new charges and are on top of those announced in May, he said.
