GE uncovers accounting 'deficiencies'
Problems with spare parts cause further controls stengthening at US giant
General Electric has uncovered ‘significant deficiencies’ in its accounting
for revenue, it has said as it pledged to tighten its financial controls.
The US giant said in
its
annual 10-K that the problems emerged after a review of revenue recognition
prompted by an SEC investigation.
The revenue issues relate to revenue received in connection with spare parts.
‘We have concluded that the internal control deficiencies implicated by the
items identified above constitute significant deficiencies in our internal
control over financial reporting, but do not constitute a material weakness in
the Company’s internal control,’ the company said.
There will be no adjustments to figures resulting from the deficiencies,
however. Instead, the company said it was tightening controls by improving the
understanding of accounting policies for unusual transactions, among other
moves.
GE has had to restate earnings in recent years, having had to reduce stated
earnings of $118bn by £297m between 2002 and 2007.
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