Qwest restates $950M of revenue
Qwest Communications International Inc. will restate about US$950 million of revenue that it booked in 2000 and 2001 from the exchanges of optical capacity assets, the company said in a release Sunday.
These are similar transactions to those the company admitted to in July and which have been the subject of various government investigations in the U.S.
A further $531 million may need to be restated over the same period related to sales of optical capacity assets for cash, according to the statement. The total sum in question amounts to 5.2 percent and 2.8 percent of total reported revenue in 2001 and 2000, respectively, the company said.
Qwest said that the transactions in question had been booked in line with accounting policies approved by its previous auditor Arthur Andersen LLP, which has since ceased its auditing practice.
The transactions, known as swap transactions, consisted of selling capacity to another carrier and simultaneously buying capacity from that carrier for almost the same dollar amount, enabling both parties to book apparent revenue, and show inflated growth, without any money changing hands.