Financial authority orders Garuda to restate 2018 results | New
The country’s Financial Services Authority (OJK) ordered Garuda Indonesia to restate its 2018 financial statements, after questions were raised about how it accounted for future income from a wi-fi and internet agreement. in-flight entertainment as an operating element.
The OJK says Garuda will have to submit a revised financial report within 14 days because it did not comply with Indonesian accounting standards.
Three separate fines, worth 100 million rupees ($ 7,080 each), were imposed on Garuda, the directors of the company and its member commissioners, for violating the standards stipulated in the annual reports.
A one-year suspension was also imposed on Garuda’s auditor, and he was given three months to “improve quality control and procedures” of his audit reports.
The OJK orders came weeks after two of Garuda’s commissioners questioned the accounting treatment of the deal, which saw the airline report an annual operating profit of $ 101 million for 2018, after entering into a one-time $ 242 million deal with Mahata Aero Teknologi as the operating company. Object.
âThe imposition of sanctions and / or a written order by OJK on Garuda Indonesia, its members and / or members of the commission, the public auditor and the audit company is one of the firm actions it takes to maintain public confidence in Indonesian financial markets, âsays the authority.
Garuda Group’s revenue for the fiscal year ended Dec.31, 2018 increased nearly 5 percent to $ 4.37 billion, but higher O&M expenses pushed total expenses up by 8% to $ 4.58 billion. Together, these numbers suggest the carrier’s loss before interest, taxes, depreciation and amortization would have amounted to $ 210 million.
In May, Garuda explained that he would be able to recognize service revenue once the deal meets four specific conditions. Although she had not yet received payment from Mahata, the amounts she was to receive had become debts owed to the airline.
Following the OJK’s decision, Garuda said he would review the authority’s decision, while acknowledging that the Indonesian state audit commission is conducting its own investigations.
The airline also pointed out that its 2018 results were independently audited and that its deal with Mahata does not violate any laws or regulations.
Source: Cirium Dashboard