Reliant FORM 10-K manual Revenues and cost of revenues

Summary of Restatement Adjustments for the year ended December 31, 2001:

	Revenues							Inter-									Dis-
	and cost of				Foreign	company			Special				Reclassifi-			continued			Total
		revenues		exchange		balances			charges		Other				cations	operations		adjustments
Revenues	$		1,534	$	(42)	$	–	$	–	$	–	$	–	$	–	$	1,492
Cost of revenues			522		(73)			45		152		(88)			40		–		598
Gross profit		1,012			31		(45)			(152)		88		(40)			–		894
Selling, general and administrative expense			–		(31)		42			–	(233)			(12)			536		302
Research and development expense			–		–		(27)			–		(54)		(5)			–		(86)
Amortization of intangibles — goodwill			–		–			–		(91)		–			–		–		(91)
Deferred stock option compensation			–		–			–		123		–		16			–		139
Special charges
Goodwill impairment			–		–			–		(695)		–			–		–		(695)
Other special charges			–		–			–		(150)		–			–		–		(150)
(Gain) loss on sale of businesses and assets			–		–			–		–		(3)		29			–		26
Other income (expense) — net			–		(194)		8			–		(22)		90			–		(118)
Interest expense — long term debt			–		–			–		–		(4)			–		–		(4)
Interest expense — other			–		–		10			–		2			–		–		12
Income tax benefit (expense)			–		–			–		–	(401)				–		–		(401)
Minority interests — net of tax			–		–			–		–		(12)		(22)			–		(34)
Net earnings (loss) from
discontinued operations — net of tax			–		–			–		–		–			–		529		529
Total restatement adjustments	$	1,012		$	(132)	$	(42)		$	661	$	(59)	$		–	$	(7)	$	1,433

Additionally, the cumulative effect of the Second Restatement adjustments was a (decrease) increase to additional paid-in capital, deferred stock option compensation, accumulated deficit and accumulated other comprehensive loss as of January 1, 2001, as previously reported, of $(10), $56, $1,432 and $(189), respectively. The effect of the Second Restatement adjustments on the consolidated balance sheet as of December 31, 2002 is shown following the discussion below.

Revenues and cost of revenues

Revenues and cost of revenues were impacted by various errors related to revenue recognition, corrections to foreign exchange accounting, intercompany related items, special charges and other adjustments, including financial statement reclassifications. These items are further described below. The net impact to revenues of the adjustments was an increase of $439 and $1,492 for the years ended December 31, 2002 and 2001, respectively. The net impact to cost of revenues related to these revenue adjustments, and the other corrections was an increase of $305 and $598 for the years ended December 31, 2002 and 2001, respectively. The following table summarizes the revenue recognition adjustments and other adjustments to revenues and cost of revenues, which increased gross profit by $134 and increased gross profit by $894 for the years ended December 31, 2002 and 2001, respectively:

F-21