NTL makes £30m restatement
Cable group NTL is to take a £30m hit on its books after dropping an aggressive accountancy policy installed by former chief executive Barclay Knapp.
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The company said that it is to reduce the amount of costs that it capitalises in the future, a policy that can boost short-term earnings but hurt long-term profitability.
New chief executive Simon Duffy said the company is now taking a ‘prudent and conservative approach to accounting’ but that while the new system will hit the profit and loss account, the company’s cash position would be unaffected.
The change means that whereas NTL used to capitalise the cost of an engineer visiting a customer’s home whether they had a line fitted already or not, it will now only capitalise the cost if a new line is being installed.