Motorcar Parts of America, Inc.,(MPA) which had been cited for a delay in filing financial results by the U.S. Securities and Exchange Commission, has released a statement explaining the reasons for the delay.
MPA states that “it has determined that changes in certain historical accounting policies utilized by Fenwick Automotive Products Limited (Fenco) prior to the company’s acquisition in May 2011 of this previously privately held Canadian company are necessary in order to file its Form 10-Q filing with the U.S. Securities and Exchange Commission for its fiscal 2012 second quarter ended September 30, 2011.
“Fenco’s accounting policies did not previously reflect net-of-core accounting in recording sales and cost of goods sold, as utilized by Motorcar Parts of America and in accordance with U.S. generally accepted accounting principles (GAAP),” the statement continues. “In addition, the systems required to segregate and net the core transactions accurately were inadequate. As a consequence, the necessary systems and policies are being established at Fenco. The company is working diligently to inventory Fenco’s cores and ensure that the core entries are reported in accordance with GAAP.”
“Our rotating electrical business remains strong and we look forward to resolving these accounting matters related to our Fenco subsidiary as quickly as possible,” said Selwyn Joffe, chairman, president and chief executive officer.
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