NORTH CANTON, Ohio — Diebold Inc. says it has concluded its discussions with the Office of the Chief Accountant of the Securities and Exchange Commission regarding the its prior practice of recognizing certain revenue on a "bill and hold" basis. Diebold says it now has established a revised revenue-recognition method.
According to a news release, on Oct. 2, 2007, Diebold said it was discontinuing the use of bill and hold in both its North American and international businesses. Based upon further discussions with the OCA, Diebold decided to change its revenue recognition policy.
For revenue previously recognized on a bill and hold basis, Diebold will now recognize revenue upon a customer's acceptance of products at a customer location. Within the North America business segment, when the company is contractually responsible for installation, acceptance will be based on completion of the installation of all of the items at a job site, as well as Diebold's demonstration that the items are in operable condition.
In instances when Diebold is not contractually responsible for installation, the company will continue to recognize revenue after shipment of the products to a customer location.
Diebold's revised method of recognizing revenue will be adopted immediately and comes after an in-depth analysis and review with external auditors, the company's board of directors' audit committee and the OCA.
Diebold says its financials for fiscal years ended Dec. 31, 2006, Dec. 31, 2005, Dec. 31, 2004 and Dec. 31, 2003 must be restated to reflect the company's revised accounting method. Diebold's quarterly data for every quarter in 2006 and 2005, as well as for the quarter ended March 31, 2007, also must be restated.
Revenue previously recognized under the company's prior bill and hold practice will be deferred until customer acceptance of the products.
Once Diebold has reviewed the impact of the accounting change on its 2006 and 2007 revenue, it plans by the end of January to provide updated revenue estimates. The company anticipates that the review of the impact of the accounting change will be completed by the end of January 2008.
The company anticipates the review of other accounting items to be completed during the first quarter of the year. Afterward, Diebold will file amended financial statements and complete and file its annual report for 2007 as well as its quarterly reports for the second and third quarters of 2007.
