PracticeConsultingAccounting charge hits EDS for £800m

Accounting charge hits EDS for £800m

IT consultants EDS, the company responsible for implementing the disastrous Inland Revenue tax credits system, will record an after-tax charge of $1.42bn (£800m), or $2.92 per share to reflect the adoption of a new accounting rule.

Link: EDS cuts 2% of global workforce

The accounting standard – EITF 00-21 – which affects revenue recognition, will be applied retroactively to EDS financials from 1 January 2003.

The company has also released adjusted historical earnings and revenue data in order to provide comparative data ahead of tomorrow?s third quarter results.

EITF 00-21 was finalised by the Emerging Issues Task Force in May this year and is intended to tackle billing and cost issues over long term contracts such as those in the IT services sector.

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