October 22, 2002, 8:56 AM — Global Crossing Ltd. Monday announced it will restate financial results to remove nearly US$19 million in revenue related to exchanges of network capacity with other communications companies.
The bankrupt telecommunications company said it had relied on accounting guidance from Arthur Andersen LLP to determine ways to record sales of network capacity and services. The U.S. Securities and Exchange Commission (SEC), which is already investigating Global Crossing, advised the company that these accounting principles did not comply with Generally Accepted Accounting Principles (GAAP), according to a statement. Global Crossing, which operates out of Madison, New Jersey, is also being investigated the U.S. Department of Justice.
The revised financial statement will cover revenue reported by Global Crossing for the nine months ended Sept. 30, 2001. Global Crossing reported $2.4 billion in revenue for that period. The new statement also will increase the company's net loss of $4.77 billion for the nine months by nearly $13 million.
The company expects the revised statements to be reviewed by another accounting firm, which Global Crossing has not yet named, according to the statement.