CA issues
accounts restatements
By Richard Waters Published: October 20 2005 03:00 | Last updated: October 20 2005 03:00
Computer Associates yesterday issued the
latest in a series of accounting restatements, including an admission for
the first time that its controversial switch to a new way of booking
revenues in 2001 had resulted in incorrect accounting.
The US software company, which replaced most of its senior executives amid an accounting scandal, had said this year it would revise its figures after discovering "improper accounting" on a number of software contracts between 1999 and 2001. In a filing with the Securities and Exchange Commission reflecting those revisions, however, it also highlighted new inaccuracies that had resulted in revenues being booked earlier than they should have been from 2003 to 2005. In 2001, CA switched from charging up-front licence fees for its software to a subscription system that required it to spread the recognition of income over a number of years - a new business model that some critics claimed left room for improper accounting. In its filing yesterday, CA said it had booked $66m of revenues under the new model earlier than it should have in 2003-2005, and would reduce its future revenues by $80m. Richard Waters,San Francisco
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