Item 4.02 - Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On November 13, 2013, management of Perma-Fix Environmental Services, Inc. (the "Company") concluded, in consultation with the Audit Committee of the Board of Directors ("Audit Committee") and BDO USA, LLP, the Company's independent registered public accounting firm, that the following financial statements previously filed by the Company with the Securities and Exchange Commission ("SEC") should no longer be relied upon: the audited consolidated financial statements for the years ended December 31, 2012, 2011, and 2010 on its 2012 Form 10-K as filed with the SEC on March 22, 2013.
During the process of reviewing and filing the Company's 2012 tax returns, the Company identified information related to a certain deferred tax asset that was recorded as part of the acquisition of our Diversified Scientific Services, Inc. subsidiary ("DSSI") in 2000. Upon subsequent analysis of this information, the Company determined that there was not sufficient support for a portion of the deferred tax asset. To correct the error, based on our preliminary analysis, the Company intends to reduce the beginning retained earnings balance in 2010 by approximately $1.6 million, reduce income tax expense by approximately $1.4 million in 2010, record approximately $6.3 million of income tax expense in 2011 and reverse the $3.3 million of income tax expense recorded in 2012.