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March 18, 2014
16:35 EDTAVIDAvid Technology to delay filing 10-K
As previously reported, Avid Technology is in the process of restating its financial statements for the fiscal years ended December 31, 2011, 2010 and 2009 and for its quarterly periods ended September 30, 2012 and 2011, June 30, 2012 and 2011, and March 31, 2012 and 2011. The restatement relates to the company’s accounting treatment of certain upgrades, enhancements and compatibility extensions it previously made available to certain of its customers at no-charge. The company has determined that such Software Updates should have been accounted for as implied post-contract customer support under U.S. Generally Accepted Accounting Principles. The company expects that the timing of revenue recognition for the impacted customer arrangements will change from the historical presentation in the company's financial statements pursuant to which revenue was recognized up front, generally to being recognized ratably over the estimated implied PCS service period. In addition, the timing of recognition of certain costs related to these customer arrangements may also be impacted, along with the timing of related income taxes. The company cannot at this time estimate the full impact of the adjustments of revenue and costs, and the related impact on income taxes, on any previously issued financial statements for any individual reporting period, but expects that its restated balance sheet will reflect a significant increase in deferred revenue for all periods presented, representing the deferral of revenue that the company had previously recognized in earlier periods. While the restatement adjustments will impact previously reported revenue and operating results for prior periods, the restatement adjustments are not expected to affect the amount of total revenue ultimately to be earned or the amount or timing of cash received, or to be received, from the sales transactions or the company's liquidity or cash flow for any prior period. Pending completion of the restatement work, the company is not able to complete and cannot file its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 by the prescribed due date or by April 1, 2014, the fifteenth calendar day after the prescribed due date. The company will continue to work expeditiously to file as soon as practicable thereafter and is targeting mid-2014 for completion of the restatement and becoming current in its required filings with the SEC.
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