Last October, Vail Resorts restated and reissues its financial statement for 1999 through 2001, reflecting a revision in the accounting for these club initiation fees. During that period, Vail booked $46.8 million of net income. Vail has since reduced its profits to $32.9 million as it reviewed the books.

The company says is fully cooperating with the SEC. Vail Resorts says it conducted its own internal review and concluded the accounting treatment did not involve any impropriety on the part of any company officers or employees.

Rather, it says, its former independent auditors, Arthur Anderson, approved the past accounting methods. Last June, Vail Resorts changed auditors to PricewaterhouseCoopers LLP.

After voluntarily consulting with the accounting staff at the SEC, Vail Resorts says it concluded that the cash initiation fees should be recognized as revenue estimate over the estimated life of the club, which the company estimates to be 30 years.

Vail Resorts subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, Heavenly Resort in California and Nevada and the Grand Teton Lodge Company in Jackson Hole, Wyoming. In addition, the Company's RockResorts luxury resort hotel company operates 10 resort hotels throughout the United States.