Foothill Ranch retailer Wet Seal Inc. said Monday that its method of accounting for tenant improvement allowances and rent holidays doesn’t agree with Securities and Exchange Commission guidelines.
Wet Seal said its lease accounting also wasn’t in line with generally accepted accounting principles in the U.S.
The teen retailer has twice delayed releasing its fourth quarter and annual results because of its accounting review.
Wet Seal said it expects to correct some of its recent financial releases, something it said other retailers also would be required to do.
The company plans to refile its annual report for the 12 months ended Jan. 31, 2004 and its quarterly reports for the first three quarters of the year ended Jan. 29, 2005.
The company also plans to restate its income taxes for the second and third quarters of the year ended Jan. 29, 2005.
