ATM and voting machine maker Diebold said that the Justice Department, in addition to the Securities and Exchange Commission’s Office of the Chief Accountant, has been investigating its accounting practices.
The main issue has been the company’s prior practice of recognizing certain revenue on a bill-and-hold basis. These are situations when ownership of a product passes contractually to a customer, but the revenue is recognized by the supplier prior to the delivery of the products.
Diebold said it has been continuing to talk with the OCA about the most appropriate way to recognize revenue to replace its bill-and-hold practices. Once it has a new method of revenue recognition in place, the company will issue revenue estimates for full-year 2007.
Diebold said it recently learned that the Justice Department is conducting an investigation in parallel with the OCA investigation. The company and its audit committee, along with outside advisors, have also been reviewing the issues. Diebold predicted the audit committee review would be completed by the first quarter of 2008.
