15. Correction to Previously Issued Financial Statements
Subsequent to the issuance of the Company’s consolidated financial statements for the years ended December 31, 2010 and 2009, the Company concluded that its liability for refundable deposits due to its Kapalua Club members was understated by approximately $1,506,000 as of December 31, 2010 and 2009. This understatement originated from initiation dues received for memberships issued in years prior to 2009 for which the refundable portion was not recorded as a liability. In addition, the Company concluded that the estimated interest on uncertain tax positions was overstated by approximately $571,000 as of December 31, 2010 and 2009 because of net operating losses available to be carried back from 2008 and 2009 to earlier years. As a result, the accompanying condensed consolidated Statement of Stockholders’ Deficiency for the nine months ended September 30, 2010 and the accompanying condensed consolidated Balance Sheet as of December 31, 2010 have been corrected as follows:
|
|
As Previously
Reported |
|
Adjustments |
|
As Corrected |
|
|
|
(in thousands) |
|
Statement of Stockholders’ Deficiency |
|
|
|
|
|
|
|
Accumulated Deficit, January 1, 2010 |
|
$ |
(116,723 |
) |
$ |
(935 |
) |
$ |
(117,658 |
) |
|
|
|
|
|
|
|
|
Balance Sheet, December 31, 2010 |
|
|
|
|
|
|
|
Income taxes payable |
|
$ |
4,016 |
|
$ |
(571 |
) |
$ |
3,445 |
|
Total Current Liabilities |
|
44,143 |
|
(571 |
) |
43,572 |
|
Other noncurrent liabilities |
|
2,741 |
|
1,506 |
|
4,247 |
|
Total Long-Term Liabilities |
|
70,507 |
|
1,506 |
|
72,013 |
|
Accumulated deficit |
|
(91,971 |
) |
(935 |
) |
(92,906 |
) |
Stockholders’ Deficiency |
|
(24,245 |
) |
(935 |
) |
(25,180 |
) |
Management does not consider the foregoing corrections to be material. |