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America’s Car-Mart Overstates Revenue by $6.1 Million, or 2%
Used car dealer recognized charge offs as sales rather than reduction in receivables.
December 12, 2022
America’s Car-MArt (CRMT), a used car dealer, overstated sales in several periods over the course of the last two years. In the quarter ended July 31, 2022, America’s Car-Mart overstated sales by $6.1 million, or 2% of sales. The company also misstated sales totals in three periods during 2021.
The company corrected the misstatements in its latest quarterly filing.
America’s Car-Mart attributed the misstatements to an error related to the classification of deferred revenue of ancillary products at the time an account is charged off and the calculation for allowance for credit losses. Previously, America’s Car-Mart recognized deferred revenue as sales when a customer account was “charged off” as the company’s performance obligations for the deferred revenue were no longer required to be delivered.
Subsequent to the previous quarter, America’s Car-MArt says it determined the treatment was inappropriate and should be recorded as a reduction to customer accounts receivable at the time of charge-off.
The company says the misstatements were immaterial but disclosed a control deficiency related to the errors.
In June, America’s Car-Mart notified the SEC it would not be able to file its annual report on time. The company was surprised to learn it had become what’s known as a “Large Accelerated Filer”, and required to file annual reports 15-days sooner than when the company was classified as an “Accelerated Filer.”
The company’s CFO since 2018, Vickie Judy, has been with the firm two decades, previously worked at Arthur Andersen, and has been chair of the board of the Little Rock Branch of the Federal Reserve Bank of St. Louis since January 2020.
Related: KMX, LAD, AN, CACC, CPSS, SC, ALLY
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