McLean, Va. ? The cleanup of WorldCom’s tainted books reveals pre-tax losses of $74.4 billion not previously reflected in the company’s financial reports for 2000 and 2001, MCI said Friday in a long-awaited report that wipes away a vast accounting fraud and reflects the plunging value of telecommunications assets.

The financial restatement is likely the biggest in corporate history. But as an adjustment on paper only, it has no direct impact on the renamed telephone company’s operations or bid to emerge from bankruptcy.

The adjustments, issued in MCI’s annual report, also includes the company’s first report of its full-year results for 2002: a net loss of $9.2 billion on revenue of $32.2 billion.

The adjustments for the two prior years would mean that WorldCom actually suffered a a net loss of $48.9 billion in 2000 and a net loss of $15.6 billion in 2001. The company had reported profits for both those years.

The restatement helps clear a major hurdle in MCI’s bid to emerge from bankruptcy protection.

The company, which filed for bankruptcy as the scandal broke in July 2002, plans to exit Chapter 11 by the end of April.

Although the revisions technically apply only to the years 2000 and 2001, MCI said it basically rebuilt its books from scratch, going all the way back to 1993, to develop a proper accounting.

“This filing culminates the largest and most complex financial restatement ever undertaken,” said chief financial officer Bob Blakely. “It is one of the last remaining milestones on our path to emerge from Chapter 11 protection.”

The filing attributes $8.8 billion of the $74.4 billion restatement to the financial irregularities and questionable accounting practices that have led to criminal investigations and charges against former senior executives at the company, including former Chief Executive Bernard Ebbers.