Jarvis to shake-up accounting procedures due to PFI growth.
Strong growth in Private Finance Initiative deals clinched by Jarvis has sparked the facilities management group to radically overhaul company accounting procedures writes Jerry Frank. Jarvis last week revealed its accounting shake-up alongside booming order books that have doubled over the past year to #2.2bn despite boardroom changes and a long running dispute with Railtrack. The overhaul comes a month after Ernst & Young took over as auditor from Pricewaterhouse Coopers following a dispute over escalating fees. PwC believed the complexity of the Jarvis audit required additional fees to be charged. New contracts under PFI and the University Partnership Programme (UPP) prompted the board to review accounting policies. FD Henry Lafferty said: ‘The decision had been taken to adopt a policy to better reflect the profile of the business.’ The changes will smooth profit flow by spreading profits and turnover from the design and preparation stage of contracts over the period of construction. Lafferty said: ‘The changes will not affect cash flows, revenues or profits that will be earned by the group over the life of these contracts. It only alters the timing of the recognition of revenues and profits.’ Jarvis has earmarked #12m to spend on upgrading computerised management systems. www.jarvisplc.com.