Financial Accounting Blog

Monday, February 23, 2004

Reuters reports that JLG is restating earnings due to premature reporting of revenue.
Specifically, the company announced that it has determined that one transaction with $8.7 million in net revenues was recognized prematurely. The transaction, with a single customer, was incorrectly reported as a sale, rather than a consignment sale, which allows recognition of the revenues only upon final sale of the equipment by the consignees. At this time, all of the equipment has been sold, and the restatement has no cash impact. The company's outside auditors have advised management that the improper accounting of this transaction reflects a material weakness in internal controls.