Earnings Restatement

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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated September 30, 2020

What is an Earnings Restatement?

An earnings restatement, also called an earnings recast, is the act of disclosing amended financial statements.

How Does an Earnings Restatement Work?

Let's assume Company XYZ sells its pharmaceutical division to Company ABC. The pharmaceutical division was a significant generator of revenue for Company XYZ.

After the sale, it issues an earnings restatement by disclosing the last five years of financial statements -- with the pharmaceutical division excluded.

Why Does an Earnings Restatement Matter?

Earnings restatements can be corrections in financial statements, but they can also help investors get a comparative sense of how a company is performing without a recently divested asset, with a change in accounting method, or with some other significant change in operations.

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Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Earnings Restatement, then please ask Paul.

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