IBM disclosed in an SEC filing on Tuesday that regulators are looking into its accounting treatment of revenue received during transactions in the US, UK, and Ireland.
Following the disclosure, shares of the company were down as much as 3.5%.
The disclosure was buried in the company’s 10-Q filed with the SEC.
In the filing, the company said only:
In August 2015, IBM learned that the SEC is conducting an investigation relating to revenue recognition with respect to the accounting treatment of certain transactions in the U.S., U.K., and Ireland. The company is cooperating with the SEC in this matter.
So, not a lot of detail here, but it looks like the SEC is basically looking at how the company decides when it reports revenue for the services it offers and products it delivers to customers. This could potentially lead to the company restating past financial results.
IBM, based in the US, does about 52% of its business outside of North and South America.