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July 6, 2015

Toshiba may cut operating profits by over $800m

The company expects to post the earnings for the 12-month period ending 31 March in August.

By CBR Staff Writer

Toshiba is expected to mark down its past operating profit by more than ¥100bn ($814m), almost double its previous estimates, due to accounting irregularities.

Citing unnamed sources, the Nikkei Business Daily reported that the newly discovered errors were associated to computer parts procurement, resulting in an earnings mark down of about ¥150bn.

Toshiba did not report its earnings for the 12-month period ending 31 March due to the accounting problems. The company expects to post the earnings by the end of next month, crossing its original dead line of June.

Commenting on Japanese media reports, Toshiba responded with a statement saying it has not made any such announcement, and is not currently aware of any matters that should be disclosed.

The company has appointed an independent committee to investigate the accounting errors. The panel is expected to report its findings by mid-July.

The investigation will focus on accounting in relation to the percentage-of-completion method and recording of operating expenses in the visual products business.

It will also focus on valuation of inventory in the semiconductor business, particularly discrete and system LSIs, and component transactions in the PC business.

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