March 28, 2002, 1:35 PM — The U.S. Securities and Exchange Commission (SEC) asked IBM Corp. to consider amending its 1999 annual report, according to a report Thursday in the Wall Street Journal.
The request, which did not lead to changes in the report,
The newspaper based its story on four letters it obtained through a Freedom of Information Act request. The letters, which the paper characterized as "testy," were reportedly sent in mid-2000 to IBM by the SEC's Division of Corporation Finance.
IBM has faced questions before about aspects of its accounting practices, particularly the way it records gains from its overfunded pension fund. IBM writes off the difference between its pension fund assets and liabilities, a tactic that for several years has added millions in cost and expense reductions to IBM's balance sheet.
The company also drew fire earlier this year for quietly recording a $280 million gain from selling assets at the tail end of 2001. The move masked IBM's true operating costs for the quarter, several analysts said at the time.
An IBM spokeswoman deflected queries about the Wall Street Journal report, pointing to a statement IBM issued that states that comment letters from the SEC are routine and private.
"The letters in question date back several years, and these issues were closed in a satisfactory manner," the statement said. "As we have stated previously, we have consistently complied with applicable accounting rules and regulations. We are proud of our accounting and disclosure practices, and we stand behind them."