Data#3 FY23 revenue $1.67b lower than first reported
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The news: Data#3 has restated its revenue for the 2023 financial year as $1.67 billion lower than it reported after making changes to its accounting policy.
The numbers: Last year, the company reported its FY23 revenue as $2.5 billion but announced today it was instead $830 million, down $1.67 billion, following concerns from the corporate regulator regarding its accounting policy.
Data#3 also reduced reported revenue for the half year to December 2022 by $761 million.
The company's share price rose 1.42% to $8.61 in early trading on the ASX today.
The context: In November 2023 the Australian Securities and Investments Commission (ASIC) raised concerns with Data#3 regarding its revenue accounting policy.
The company then changed its accounting policy to recognise revenue from contracts for the sale of some software products as an agent rather than a principal. Accordingly, only net earnings on those sales were recognised as revenue.
ASIC noted that when an entity acts as an agent and recognises all the revenue in relation to a product or service it on-sells, it can create a misleading impression about the size of a business and the potential influence it has on its own profitability.
The regulator said there is no impact to profit before tax due to the offsetting expense being eliminated when the revenue is no longer recognised.
The source: ASIC media release
