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Crown Inflates Profit With Accounting Change, Corrects Cash Flow Error

Packaging maker revises three years of financials while simultaneously changing useful life estimates.

May 11, 2023

While simultaneously correcting three years of cash flow statements Crown Holdings Inc. (CCK), a supplier of rigid packaging products, revealed an accounting change significantly inflated net income in the first quarter of 2024.

After outsourcing a review of the useful life estimates of its beverage machinery and equipment and buildings, Crown Holdings disclosed:

“... effective January 1, 2024, the Company revised the estimated useful lives of buildings up to 50 years and machinery and equipment up to 23 years.”

The change increased Crown’s net income $16 million, or 17.2%.

Separately, Crown also corrected its presentation of certain borrowings and repayments of short-term debt that did not qualify for net presentation on its cash flow statements.

The company now presents these borrowings and repayments of short-term debt on a gross basis within cash flows from financing activities.

Crown corrected its cash flow statements between 2021-23.

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