Question

Advanced Drainage Systems 1. Looking at the footnotes, in your own words, what were the errors that occurred? 2. What did the Audit Committee conclude regarding the reliability of the financial statements? 3. What did The Company (Advanced Drainage Systems) do about the errors? 4. What was the beginning balance in Total Stockholders' Equity at April 1, 2012? 5. What was the total amount of the "cumulative restatement adjustment" (prior period adjustment)? 6. What was the adjusted balance in Total Stockholders' Equity at April 1, 2012?

Answer 1

1)

During fiscal 2015, the company has reported some errors in its financial statements.

The errors are relating accounting treatment of transpiration expense, leasing of equipment and inventory method used to value closing inventories. On performing additional review procedures,also identified errors In the accounting of fixed assets and some other miscelleanous items.

2)

The audit committee of ADS concluded that the Companys’ previously issued audited financials should no longer be relied upon.

3)

The Company has restated its consolidated financial statements of the fiscal year ended March 31, 2015, and for all of the quarterly periods in the fiscal year ended March 31, 2014. The restatement also affects periods prior to the fiscal year 2013, with the cumulative effect of the errors reflected as an adjustment to the fiscal year 2013 opening stakeholders’ equity (deficit) balance.

4)

Beginning balance in Total shareholders’ equity as on April 1, 2012- $(267,849) thousands

5)

Amount of “cumulative restatement adjustment- $(7,836) thousands

6)

Adjusted balance in Total shareholders’ equity as on April 1, 2012- $(275,685) thousands