Truck Maker Settles With SEC for $225,000

SEATTLE (CN) - Paccar, a truck maker, will pay $225,000 for accounting deficiencies during the financial crisis, the SEC said Monday.

The SEC also sued Paccar Financial Corp., in the settled federal complaint.

"The accounting deficiencies stem from three separate and distinct issues," the SEC said in its complaint. "First, from 2008 through the third quarter of 2012, PACCAR failed to report the operating results for its parts business as a reportable segment, as required by Generally Accepted Accounting Principles (GAAP). Because PACCAR failed to report its parts business as a separate segment, its financial reports did not contain certain information about its parts business separate and apart from the truck business, and accordingly readers of its reports may not have been able to understand PACCAR's business as seen by the Company's executives.

"Second, during 2009 PACCAR and PFC failed to maintain accurate books and records regarding their impaired loans and leases. As a result, PACCAR's and PFC's disclosures of impaired receivables and the specific reserves associated with these receivables in the notes to the financial statements filed with SEC Form 10-K filings were understated.

"Third, PACCAR made overstatements in equal and offsetting amounts to loan and lease originations and collections for two foreign subsidiaries in its statement of cash flows for two quarters in 2009.

"These errors were caused by deficiencies in PACCAR's internal accounting controls that included ineffective procedures regarding the proper application of accounting guidance to report aftermarket parts as a separate segment, the identification and evaluation of loans and leases for impairment, how to measure such loans and leases for impairment, and the calculation of loan and lease originations and collections at two foreign subsidiaries.

"The Commission seeks an order enjoining PACCAR and PFC from future violations of the securities laws."

Paccar, which makes commercial trucks, is based in Bellevue, Wash.

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