CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

9 Months Ended

Sep. 30, 2013

CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK [Abstract]

CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

2. CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

In 2012 the Company determined that changes in the level of its participation in the management of AMAK indicated that the Company had significant influence over the financial and operating policies of AMAK.  Accordingly, the Company changed from the cost method of accounting for its investment in AMAK to the equity method of accounting for the investment.  In accordance with FASB ASC 323-10-35-33 Investments – Equity Method and Joint Ventures, the consolidated financial statements for the prior periods have been retrospectively restated to account for the investment in AMAK for all periods.

The effects of the retrospective application of the equity method of accounting to the three and nine months ended September 30, 2012, are as follows:

	Three months ended					Nine months ended
	September 30, 2012					September 30, 2012
	As Reported		As Restated			As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Income
Equity in loss of AMAK	$	-	$	(528	)	$	-	$	(1,043	)
Income before income tax expense		5,296		4,768			13,922		12,879
Net income		3,532		3,004			9,514		8,471
Net income attributable to Arabian American Development Company		3,532		3,004			9,514		8,471
Net income per common share
Basic	$	0.15	$	0.13		$	0.40	$	0.35
Diluted	$	0.14	$	0.12		$	0.38	$	0.34

	Three months ended				Nine months ended
	September 30, 2012				September 30, 2012
	As Reported		As Restated		As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Comprehensive Income
Net income	$	3,532	$	3,004	$	9,514	$	8,471
Comprehensive income		3,561		3,033		9,617		8,574

	September 30, 2012
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Cash Flows
Operating activities
Net income attributable to Arabian American Development Company	$	9,514	$	8,471
Equity in loss of AMAK		-		1,043