Kohl’s Corp. said it would be late in filing its quarterly report with the Securities and Exchange Commission as it tallies the impact of accounting errors related to some of its leases.
Kohl’s, which revealed the errors last month, said its annual report and filing for the first quarter could not be relied upon.
“The company has discovered various errors in its accounting for both store and equipment leases,” Kohl’s said in the filing. “The most significant errors are the result of misinterpretations of accounting literature related to leases where the lessee (the company in this case) is involved in asset construction.”
The retailer also improperly recorded certain stores and equipment leases as operating leases rather than capital leases.
“As a result of these and other less significant accounting corrections, the company will record additional property and financing obligations on its balance sheet,” Kohl’s said. “In the company’s statements of income, lease payments will be recognized as depreciation and interest expense, rather than rent expense (which the company records in selling, general and administrative expense).”
Kohl’s said the corrections would have no impact on the net increase or decrease in its cash and cash equivalents.