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Toys "R" Us said in a regulatory statement that it had changed the accounting method for valuing its international wholly-owned subsidiaries’ merchandise inventories from the retail inventory method to the weighted average cost method.

As of February 4, 2007, the firm adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (As amended)—“Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”).

"In the fourth quarter of fiscal 2006, we identified errors in the way we had previously accounted for income taxes," Toys "R" Us said. "We did not properly record deferred tax accounts on a net basis by legal entity and taxing jurisdiction. As a result, we have restated the accompanying Condensed Consolidated Balance Sheet as of July 29, 2006."

Toys "R" Us restated net sales and expenses to reflect increases of $19 million and $35 million for the quarter and fiscal year ending July 29, respectively.

F. Clay Creasey, Jr. is Executive Vice President and Chief Financial Officer of Toys "R" Us, a firm founded in Washington in 1948. The company operates 587 stores in the US and nearly 600 stores are operating in 29 other countries, some of them under franchises or licenses. Toys "R" Us is privately owned by a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. (KKR), and Vornado Realty Trust, who paid $6.6bn for the company in 2005.

Computer Sciences Corp 

In a separate development, Computer Sciences Corporation (NYSE: CSC) announced on 10 September that, as a result of its analysis to determine the impact of the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (FIN 48), the company had discovered accounting errors for fiscal years 1997 through 2007.

These errors relate to CSC’s accounting for income taxes and for the effect of foreign currency exchange rate movements on certain intracompany accounts. Although the company is still completing its assessment of these errors, CSC currently estimates that the corrections in accounting for income taxes could result in a cumulative charge of approximately $200 million. The company expects that the corrections in accounting for foreign currency exchange rate movements on certain intracompany accounts could result in a material cumulative gain. 

Computer Sciences Corporation is a global information technology services company with approximately 87,000 employees. CSC reported revenue of $14.9 billion for the 12 months ended March 30, 2007.

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• Toys "R" Us
• Computer Sciences Corporation