NORTH CANTON, Ohio — Diebold Inc. says it is continuing its dialogue with the Office of the Chief Accountant of the Securities and Exchange Commission regarding its discontinued practice of recognizing certain revenue on a "bill and hold" basis.
Diebold has been in discussions with the SEC since October, and the investigation is ongoing. The company says it also recently learned that the U.S. Department of Justice is conducting a parallel investigation, about which Diebold did not provide additional information. It says it plans to cooperate with the SEC, and the DOJ if requested, and cannot predict the length, scope or results of the investigations, or the impact they may have on the results of the company's operations.
"As a result of the SEC's ongoing investigation, the company and its audit committee, with the assistance of their outside advisors, are reviewing these issues," Diebold says. "The company anticipates this review will be completed in the first quarter of 2008."
Bill and hold refers to the practice of selling a product and recognizing revenue before the product is delivered to the customer.
According to a news release, Diebold and the OCA are working to determine the most appropriate revenue recognition method to replace the bill and hold practice. From there, Diebold is expected be in a position to communicate a new method of revenue recognition, allowing it to provide revenue estimates for 2007.
Diebold says it does not expect the change in revenue-recognition time to impact previously reported cash provided by operating activities or the company's net cash position.
