Ford Motor Co. announced Monday that it will restate more than five years of earning. The company also announced today that it reported a preliminary third-quarter loss of $5.8 billion due to write-downs and job-cutting costs.
According to a statement released by Ford, once the costs related to job cuts and writing down the value of assets were taken into account, the total loss was $1.2 billion. Ford’s North American auto operations had a pretax loss of $1.98 billion, marking the eighth loss in nine quarters.
Ford Motor Credit announced it plans to restate previous financial results from 2001 through the second quarter of 2006 to correct the accounting for certain derivative transactions under the Statement of Financial Accounting Standards (SFAS) 133, Accounting for Derivative Instruments and Hedging Activities.
The restatements are expected to affect the preliminary financial results for Ford Motor Credit Co.’s 2006 third quarter.
According to a released statement, specific interest rate swaps Ford had used as a way to hedge interest rate risk were accounted incorrectly because they did not satisfy technical accounting rules.
PricewaterhouseCoopers LLP, the company's independent registered public accounting firm, audited Ford Motor Credit Co.'s 2001 through 2005 financial statements.