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ALSK > SEC Filings for ALSK > Form 8-K on 20-Feb-2014All Recent SEC Filings




Non-Reliance on Previous Financials, Audits or Interim Re

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On November 8, 2013, Alaska Communications Systems Group, Inc. (the "Company") filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (the "Form 10-Q"). That report disclosed (i) the Company's gain (the "Gain on Sale/Contribution") arising from the formation of The Alaska Wireless Network, LLC ("AWN"), a joint venture in which the Company holds a one-third equity interest, and (ii) certain amounts the Company classified as contingent consideration arising from the cumulative preferred distributions payable to the Company by AWN.

The Company accounted for the amount by which the preferred distributions exceeded the distributions the Company would be entitled to as a one-third equity owner of AWN (the "AWN Excess Distributions") as contingent consideration issued in connection with a business combination. The Company treated the contingent consideration as a gain contingency recognized when realized or realizable.

The Company disclosed in the Form 10-Q that the above accounting treatment differed from AWN's and indicated that the Company was working to resolve the difference. As a result of that work, on February 14, 2014, the Company's management (after consultation with the Company's independent registered public accounting firm) concluded that:

(1) The Gain on Sale/Contribution and their carrying value of the equity investment should be increased to reflect the value, as of the formation of AWN, of the AWN Excess Distributions; and

(2) The amounts presented as AWN Excess Distributions for the three and nine months ended September 30, 2013, should be eliminated and instead be considered in the total Gain on Sale/Contribution and as an increase to ACS' investment in AWN.

As a result of the above, the financial statements for the three and nine months ended September 30, 2013 (as presented in the 10-Q), should no longer be relied upon insofar as they relate to the Gain on Sale/Contribution or the AWN Excess Distributions that were classified as contingent consideration or the carrying value of the equity investment.

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