Accounting & Tax

Revenue Recognition Recount

SEC subpoenas documents from voting-machine maker Diebold, apparently in connection with two occasions on which the company restated revenue.
Stephen TaubMay 14, 2007

Diebold disclosed that it has received a subpoena from the Securities and Exchange Commission seeking documents in connection with a previously disclosed investigation into the company’s revenue recognition practices.

In a regulatory filing, Diebold — which develops and manufactures automated teller machines, security systems, and voting machines — added that it will continue to cooperate with the SEC. Diebold stressed that it cannot predict the length, scope, or results of the investigation or any impact on the company’s financial results.

Diebold disclosed an informal inquiry by the SEC in May 2006.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

At the time, company spokesman Mike Jacobsen told the Associated Press that the inquiry apparently involves two occasions on which the company restated revenue. Both situations seem to involve the company’s voting-machine operations, although the probe covers all Diebold business.

Jacobsen elaborated that Diebold shipped voting machines in Ohio in the second quarter of 2005 but then revised its reports to record the revenue in the third quarter. Diebold made the change, he reportedly added, because memory cards for the voting devices were not sent until July.

He told the wire service that the other change involved how the company reported revenue from service contracts for electronic-voting systems. In March 2006, the company disclosed that $7 million in fourth-quarter 2005 election systems revenue and $4.2 million in net income would need to be recognized in future periods.