Accounts to be published this week at
HP bought Autonomy for pounds 10.3bn in 2011, but wrote down the value of the company by pounds 5.5bn in
"These restatements, and the reasons for them, are consistent with HP's previous disclosures regarding accounting improprieties in Autonomy's pre-acquisition financials," HP said in a statement released yesterday. "The substantial work necessary to prepare these accounts has revealed extensive accounting errors and misrepresentations in the previously issued 2010 audited financial statements, including the exact problems previously identified by HP."
The findings in the
According to the accounts, many of the issues related "to the overstatement of revenues in Autonomy's US operations".
Profit at ASL has been revised down from pounds 106m to pounds 20m. Its revenue number was originally stated as pounds 176m, but is now reported as pounds 81m. The 2010 loss at ACL, the holding company, has been restated from the original pounds 12m to pounds 22m.
HP chief executive
HP complaints about Autonomy's financial reporting are being investigated by the US justice department and the
Among the issues HP said it uncovered were revenue being recognised for products where payments were unlikely to be made by the buyers, barter type transactions where the value of the sale could not be properly assessed, and sales of hardware wrongly logged as software.
HP found the ownership of a 20% stake in
A closer look at the debtors and creditors columns shows Autonomy's original accounts claimed the company was owed more by third parties and its own subsidiaries abroad than HP thought it should have been. The original accounts put the amount owed to ASL at pounds 266m, when HP thinks the figure should have been pounds 148m. Amounts owed by other group companies were originally recorded at pounds 216m, but have been revised to pounds 108m.
ASL owed money too. The original accounts put debts at pounds 36m, but HP believes pounds 64m was outstanding in 2010.
A spokesperson for the former senior management of Autonomy said: "We continue to reject these allegations by HP. Given the size of HP's writedown, we are very surprised by the small size of the adjustments in
The amount by which HP concludes that Autonomy's revenues were overstated in its 2010 accounts
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