Telecom accounts cleared by Securities Commission

Telecom has been cleared by the Securities Commission of any impropriety over its accounting practice.

Telecom has been cleared by the Securities Commission of any impropriety over its accounting practice.

Questions were asked about Telecom's accounting procedure, with regard to its treatment of revenue earned through so-called "bandwidth trading".

The commission says Telecom has acted within New Zealand's "generally accepted accounting practice" in reporting earnings from such trading in the year the contract took effect, rather than spreading the earnings out over the lifespan of the contract.

Commission communications manager, Catherine Chapman, says companies must comply with the regulations in their home country and also must report any differences that occur when reporting to other markets as well.

"Companies that are listed on [more than one exchange] have to comply with all the accounting standards."

Chapman says this situation is not unique to Telecom but is a byproduct of doing business on the international stage.

The commission chair Jane Diplock says this kind of problem highlights the need to "harmonise" accounting standards around the world.

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