Alarmforce restates financials to come up to speed with accounting procedures
February 24, 2005
TORONTO, Ontario - In late February, Alarmforce Industries announced it restated its financial statements for the first three quarters of the year that ended Oct. 31, 2004, and the corresponding three quarters and annual figures for the year that ended Oct. 31, 2003, to comply with Canadian accounting procedures.
The companyÃ¢â‚¬â„¢s decision to restate its financials for the first three quarters of 2004 was based on its failure to adopt a new accounting policy, released by The Canadian Institute of Chartered Accountants Emerging Issues Committee, in December 2003 regarding the timing of revenue recognition and the classification of certain items as revenue or expense. The policy was supposed to have been originally adopted in January 2004.
As a result of the reinstatements, installation revenue and related costs from system add-ons for new and existing customers are deferred and amortized over four years, representing the term of the monitoring contract. Prior to the policy adoption, these numbers were recognized at the completion of the sales transaction.
As a result of the change, revenues decreased by 3.4 percent for the year that ended Oct. 31, 2003 and net income decreased by $177,000, while revenues for the nine months of the fiscal year that ended Oct. 31, 2004 decreased by 3.5 percent and net income decreased by $163,000.