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USATODAY.com – Restaurants have accounting trouble with leases

USATODAY.com – Restaurants have accounting trouble with leases

by Rick Turoczy on January 5, 2005

Buried in Krispy Kreme’s disclosure that it will have to restate 2004 financial results is the hint of another accounting problem. The doughnut maker said Tuesday that for years it probably miscalculated store lease-related expenses, raising the likelihood that more earnings adjustments are coming.

Already famous for serving investors a big financial hole last year, Krispy Kreme’s latest warning highlights broad concerns with how the restaurant industry accounts for lease-related expenses. The effect has been to puff up near-term earnings results without any change in company cash flows.

USATODAY.com – Restaurants have accounting trouble with leases

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