XI'AN, China, Oct. 18, 2013 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced that, during the review of the 2011 annual report and subsequent filings of China Housing & Land Development, the staff of the U.S. Securities and Exchange Commission initiated discussions and comments with the Company about the Company's accounting treatment for the accretion cost concerning certain non-controlling interest based on an effective interest rate of 45% (the "Interest Rate"). Specifically, the SEC stated that there were certain improper estimates used by the Company to calculate the Interest Rate. As a result of the comment process, the Company revised the certain estimates, which are now deemed to reasonably support an effective interest rate of 5.85% (the "Revised Interest Rate").
On October 18, 2013, upon the recommendation of the Audit Committee of the Board of Directors (the "Board") of China Housing & Land Development, the Board determined that the Company should use the Revised Interest Rate rather than the Interest Rate and that the relevant calculations should be made using the Revised Interest Rate.
The use of the Interest Rate in preparing the Company's financial statements resulted in certain material changes in (i) the Company's audited consolidated financial statements for the years ended December 31, 2012, 2011 and 2010, (ii) the Company's unaudited interim condensed consolidated financial statements for the three months ended March 31, 2013 and 2012 and (iii) the Company's unaudited interim condensed consolidated financial statements for the three months and six months ended June 30, 2013 and 2012. As such, the Board has determined that the financials (the "Prior Financials") provided in the Company's Form 10-K for the year ended December 31, 2012, the Company's Form 10-Q for the quarter ended March 31, 2013 and the Company's Form 10-Q for the quarter ended June 30, 2013 (collectively, the "Filings") should not be relied upon.
The Company will file amendments to the Filings to restate the Prior Financials using the Revised Interest Rate.