$400m accounting error at General Motors
Car giant to restate its 2001 accounts after inflating income by up to 35%
US car manufacturing giant General Motors has admitted that it will have to
restate its accounts for 2001 after finding it had over inflated its income by
between $300m (£172m) and $400m.
GM said that an accounting error had meant that the net income for 2001 had
been exaggerated by 25-35%. The error was attributed to wrongly recognising some
supplier credit agreements.
The company said that although the 2001 accounts would need to be restated,
the knock-on effect on subsequent annual results would be ‘immaterial’.
The error was discovered after conducting an internal review of its supplier
credits, which was also subject to investigation by the Securities and Exchange
Commission, according to the BBC.