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SIX Exchange Regulation has submitted a sanction proposal against Weatherford International Ltd. to the Sanction Commission of SIX Swiss Exchange. After completion of its investigation SIX Exchange Regulation is of the opinion that Weatherford International Ltd. violated the applicable accounting standards US GAAP regarding the accounting for income taxes in its 2011 financial statements.
In the opinion of SIX Exchange Regulation, Weatherford International Ltd. has committed the following violation:
Weatherford International Ltd. understated the income tax expense by USD 56 million in its 2011 US GAAP annual financial statements. Therefore, net income for the year was overstated by 20%. The error was caused by weaknesses in internal controls. The company subsequently detected and corrected the error.
The allegations of SIX Exchange Regulation are partially disputed by Weatherford International Ltd.
The length of the sanction proceedings is not defined. SIX Exchange Regulation will inform the public about the outcome of the sanction proceedings. Until that time no further information will be provided about the ongoing sanction proceedings.
Appendix regarding the accounting standards
Periodic financial reporting is part of the information required to ensure a functioning market.
Information regarding financial reporting can be found at:
http://www.six-exchange-regulation.com/obligations/financial_reporting_en.html
US GAAP "Accounting Standards Codification (ASC) 740-10"
According to ASC 740-10, an entity has to recognize the amount of taxes payable for the current year and the deferred tax liabilities and assets for the future tax consequences resulting from temporary differences between the accounting and tax values of its assets and liabilities.
