Financial Restatement
Also known as: restated financials · Item 4.02
DEFINITION
When a company concludes that previously issued financial statements should no longer be relied upon, it must file an 8-K under Item 4.02 disclosing the non-reliance, the underlying reason, and the affected periods. The corrected financials are then refiled, typically via an amended 10-K/A or 10-Q/A. Restatements can be 'Big R' (material, requires re-filing) or 'little r' (corrected in the next periodic report without re-filing).
WHY IT MATTERS FOR RETAIL INVESTORS
An Item 4.02 8-K is one of the most negative single filings a company can issue. Stock prices typically drop sharply on Big R announcements. The disclosure also resets investor trust — restatement-affected companies underperform broader markets for years on average. The exception is mechanical accounting changes (e.g., revenue-recognition standard adoption) — those are usually well-telegraphed and benign.
OFFICIAL SEC SOURCE
https://www.sec.gov/fast-answers/answersrestatement.html ↗RELATED TERMS
See Financial Restatement in a real filing
Download any 10-K, 10-Q, 8-K or 20-F as a clean PDF — free, no signup.