WEBJET SHARES DIVE AFTER DISPUTE WITH ACCOUNTANTS

WEBJET SHARES DIVE AFTER DISPUTE WITH ACCOUNTANTS

SHARES in travel site Webjet Limited (ASX: WEB) have dropped over seven per cent after the company announced it was quarrelling with its accounting firm BDO.

Webjet announced to the ASX this morning that it is involved in a "disagreement" with auditor BDO regarding the treatment of transactions associated with Webjet's agreement with tour operator Thomas Cook.

Webjet partnered with the London-based Thomas Cook tour operator in August 2016, giving its hotel business access to 3,000 hotels across Europe.

Accounting firm BDO has told Webjet that it no longer agrees with the accounting treatment adopted by Webjet in respect of recognising the Thomas Cook agreement as an intangible asset.

Webjet has rejected the advice of BDO, claiming BDO's position on the agreement is contrary to the advice obtained by Webjet from two other Big 4 accounting firms on the same issue.

Using BDO's proposed accounting treatment, Webjet says it would lose $11.5 million in earnings and would have to reduce the carrying value of intangible assets by $32.7 million.

At around 2pm (AEST), Webjet's shares dropped seven per cent to $11.76.

The company maintains it expects to report consistent with its previous earnings guidance of $80 million provided in February 2017 which was based on the accounting treatment adopted and reviewed by BDO.

Webjet is currently finalising its full year results and is due to report on 31 August 2017.

Business News Australia

 

 

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Golden handshakes to departing ASX100 CEOs hit 12-year high

Golden handshakes to departing ASX100 CEOs hit 12-year high

Around one in every six CEOs of ASX100 companies left their job&nbs...

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

The revolving door of leadership at Maggie Beer Holdings (ASX: MBH)...

Dreamworld owner reports improved ticket sales despite severe peak season storms

Dreamworld owner reports improved ticket sales despite severe peak season storms

The owner of Gold Coast theme parks Dreamworld and WhiteWater World...

Peter Farrelly's action comedy Balls Up starring Mark Wahlberg to be filmed in QLD

Peter Farrelly's action comedy Balls Up starring Mark Wahlberg to be filmed in QLD

The Australian film industry continues to attract Hollywood product...