Accounting shift cuts Circuit City earnings
Richmond-based consumer electronics retailer Circuit City Stores Inc. expects that net earnings for fiscal year 1991 will be reduced by about $1.40 a share due to a change in accounting methods for sales of extended service plans.
The accounting change, required by the Financial Accounting Standards Board, requires the company to follow the full deferral method to account for service contracts on merchandise. The $1.40 a share reduction includes an adjustment as of March 1, 1990 of $1.15 and an estimated impact on current year operations of 25 cents.
Circuit City reported a 10 percent increase in December …