Sunstates Corp/DE – ‘10-K’ for 12/31/94 – EX-18

As of:  Friday, 3/31/95   ·   For:  12/31/94   ·   Accession #:  103575-95-11   ·   File #:  1-05300

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                        144±   620K 
 2: EX-4        Exhibit 4.6                                            9±    36K 
 3: EX-11       Statement re: Computation of Earnings Per Share        2±    11K 
 4: EX-18       Letter re: Change in Accounting Principles             1      7K 
 5: EX-21       Subsidiaries of the Registrant                         1      6K 
 6: EX-27       Financial Data Schedules                               1      8K 

EX-18   —   Letter re: Change in Accounting Principles

EXHIBIT 18                                                              

March 30, 1995                                                          

Mr. Glenn Kennedy, Vice President                                       
Treasurer and Chief Financial Officer                                   
Sunstates Corporation                                                   
4600 Marriott Drive                                                     
Raleigh, North Carolina  27612                                          

Dear Mr. Kennedy:                                                       

 As stated in Note 2 to the consolidated financial statements of Sunstates
Corporation and Subsidiaries for the year ended December 31, 1994 the   
Company changed its method of inventory valuation for its furniture     
manufacturing inventories from the last-in, first-out (LIFO) method to  
the first-in, first-out (FIFO) method and states that the newly adopted 
 accounting principle is preferable in the circumstances because under the
current economic environment of low inflation, the Company believes that
 the FIFO method will result in a better measurement of operating results.
Also, as a result of the recent operating losses and demands upon its   
liquidity, the Company believes its financial position is the primary   
concern of the readers of its financial statements and that the         
accounting change will reflect inventories in the balance sheet at a    
 value that more closely represents current costs.  In connection with our
audit of the above mentioned financial statements, we have evaluated the
circumstances and the business judgment and planning which formulated   
your basis to make the change in accounting principle.                  

It should be understood that criteria have not been established by the  
Financial Accounting Standards Board for selecting from among the       
alternative accounting principles that exist in this area.  Further, the
American Institute of Certified Public Accountants has not established  
the standards by which an auditor can evaluate the preferability of one 
accounting principle among a series of alternatives.  However, for      
purposes of the Company's compliance with the requirements of the       
Securities and Exchange Commission, we are furnishing this letter.      

Based on our audit, we concur in management's judgment that the newly   
adopted accounting principle described in Note 2 is preferable in the   
circumstances.  In formulating this position, we are relying on         
management's business planning and judgment, which we do not find to be 
unreasonable.                                                           

Very truly yours,                                                       

BDO SEIDMAN                                                             
Greensboro, North Carolina                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing		Date		Other Filings
Filed on:		3/31/95		10-Q
		3/30/95
For Period End:		12/31/94
				List all Filings