BISYS To Redo Years Of Earnings Statements

Many of the restatement items identified so far deal with matters such as accounting for acquisitions, recognizing revenue for new business acquisition and conversion services, accounting for building leases, and accounting for vendor rebates, BISYS says.The changes probably will cut net income for periods before fiscal year 2004 but increase net income for fiscal year 2005 and the first half of fiscal year 2005, BISYS says.

Adjustments resulting from the restatement could cut shareholders’ equity by as much as 5%, BISYS says.

“We are disappointed that this restatement is necessary,” BISYS President Russ Fradin says in a statement about his company’s accounting problems. “However, based upon the results of the ongoing investigation to date, with the exception of the accounting for escalation clauses in leases, all of the transactions that are currently expected to be the subject of this restatement were initiated more than 18 months ago.”

BISYS notes that it must persuade issuers of its credit facility to wait for the release of the Form 10-Q for the quarter that ended March 31.

BISYS believes the credit facility lenders will wait at least until Sept. 13 for BISYS to release the Form 10-Q, but, if the lenders exercise certain credit agreement rights, BISYS might have to refinance its credit facility balance, the company says.

In separate news, BISYS says it believes resolving discussions with the U.S. Securities and Exchange Commission about alleged problems with mutual fund administration could cost it a total of about $25 million.