Financial Accounting Blog

Sunday, May 02, 2004

A yahoo financial news article reports that PepsiCo Inc.'s soft drinks and snacks divisions may face civil action from U.S. regulators over dealings with retailer Kmart Holdings Corp., the world's No. 2 soft drink company said on Friday. Regulators are probing documents signed by a Pepsi-Cola employee and another at Frito-Lay, PepsiCo said. The documents are suspected of giving incorrect timing of revenue that Kmart generated from those businesses, PepsiCo said in a statement.
In a statement, Kmart said it learned of the improperly recorded vendor allowance transactions during a review completed in early 2003, before Kmart's May 2003 emergence from Chapter 11 bankruptcy protection. Kmart said it cooperated with federal regulators in that review, and fired all employees it deemed responsible.