PracticeConsultingNorthgate pushed to restate 2001 turnover

Northgate pushed to restate 2001 turnover

£48.8m cut in turnover after watchdog orders reclassification of bonus

Commercial vehicle rental company Northgate has reduced its 2001 turnover figure by £48.8m in a restatement forced by the UK financial reporting watchdog.

The move, which arose after the Financial Reporting Review Panel intervened over its accounting policy for vehicle-related bonuses, was unveiled as the company announced its 2001 preliminary results last week.

Discussions between FRRP officials and company directors led to the volume-related bonuses from manufacturers being reclassified as a reduction in the cost of acquiring vehicles.

The effect of the change, under the rules of FRS15, is to reduce both turnover and the depreciation charge for the period to 30 April 2001 by £48.8m. In addition, net book value of fixed assets was reduced by £54.2m.

2000 figures were also restated.

Northgate’s net profit figure, however, was unaffected, and the company’s results showed growth in both turnover and profits.

The FRRP said: ‘We took the view that, to conform to FRS15, the bonuses should have been credited to the purchase price of the vehicles whose purchase price triggered the bonuses.’

Northgate’s finance director, Phil Moorhouse emphasised that the changes had not impacted on profits and assets. ‘It was a presentational issue more than anything else,’ he said.

– More at the FRRP’s site at www.frrp.org.uk.

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