Opinion ID: 1865218
Heading Depth: 1
Heading Rank: 20

Heading: Accuracy of Financial Statement.

Text: As previously indicated, the trial court felt the April 30, 1979 financial statement was inaccurate because it was not prepared according to generally accepted accounting principles and that fact was not disclosed on the statement. Based on this, the trial court held the statement also was misleading in violation of Minn.Stat. § 80A.01(b). As set out hereinbefore, we hold that the balance sheet was neither inaccurate nor did it contain any untrue statement of material facts. Dittmann traditionally used the accounting method long before sale negotiations between Hagen and Monson commenced; Monson's accountants for weeks prior to the closing had access to all of Dittmann's accounting and income tax records; and Specialized Tours to the time of the trial continued to use the accounting method of which it now complains. The material information  the accounting method  was not only discoverable, but it was available to Monson's own accountant before the closing. Thus, we hold that under the circumstances of this case, the trial court erred in holding the net worth in the balance sheets violated Minn. Stat. § 80A.01(b). In doing so we caution that our holding is limited to the facts of this case, particularly respondent's knowledge of the accounting system used and its nonreliance on generally accepted accounting principles. Under certain circumstances, not here existing, failure to disclose that a financial statement was not prepared according to generally accepted accounting principles might afford the basis of a breach of warranty or securities law violation claim.