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IBM to disclose more data
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February 19, 2002: 11:03 a.m. ET
Big Blue feels accounting heat, will provide additional transaction details.
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NEW YORK (CNN/Money) - IBM said Tuesday it will provide greater detail in its quarterly financial statements after questions were raised late last week about whether the company improperly used the sale of a unit to top analysts' forecasts in the fourth quarter.
Shares of IBM (IBM: down $2.83 to $100.06, Research, Estimates) continued their recent fall, shedding about 1.25 percent as the tech bellwether became the biggest decliner on the Dow Jones industrial average in late morning trade.
Big Blue's financial disclosure changes will include releasing information on intellectual-property income, the impact of gains and losses from its investments in other companies, the effect of amortization of goodwill from acquisitions, gains on sales of real estate, and the impact of income from IBM's overfunded pension plan.
In an interview with the Wall Street Journal, IBM Chief Financial Officer John Joyce defended the company's past accounting practices as proper and within accounting guidelines. But he said demands by shareholders and analysts for additional information had led the company to decide to release more information.
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CNNfn's Amanda Lang takes a closer look at IBM's disclosure changes.
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IBM shares lost $5 Friday to close at $102.89 after the New York Times reported that the company used a $300 million one-time gain from the sale of its optical transceiver business to JDS Uniphase (JDS: Research, Estimates) to top fourth-quarter forecasts.
The company did not give details of the gain from the sale in its fourth- quarter earnings release, although it has yet to file its quarterly financial statement detailing earnings with the Securities and Exchange Commission.
IBM is the latest company to respond to increased investor concern with accounting practices in the wake of the collapse of Enron Corp.
Conglomerate Tyco International Ltd. (TYC: up $0.23 to $28.13, Research, Estimates) has seen its stock decline on questions about some of its acquisitions and accounting practices. Donut retailer Krispy Kreme Doughnuts Inc. (KKD: up $0.91 to $37.76, Research, Estimates) said last week it will restructure a deal that would have used off-balance-sheet financing to build a new $35 million manufacturing facility.
In addition, PNC Financial Services Group said Tuesday it will restate its 2001 consolidated net income downward by $35 million due to an accounting error. 
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