SEC eyes $400 million in AOL revenue
Regulators reviewing AOL Time Warner's accounting may require restatement of as much as $400 million in ad revenue. Also, the company's top executives were paid $1 million in 2002.
AOL disclosed the accounting issue in a securities filing Friday.
In a separate SEC filing, the company revealed that Chief Executive Officer Richard Parsons, Chairman Steve Case, Vice Chairmen Kenneth Novack and Ted Turner were all paid the same $1 million salary in 2002 that they had received in 2001.
In dispute are two advertising deals for $125 million and $275 million booked during the first quarter of 2001 through the fourth quarter of 2002. They represent the largest advertising transactions by America Online during that period, the company stated in the filing.
AOL said the SEC has told the company that the agency's "preliminary view" is that the revenue should not have been recorded as advertising revenue but as a reduction in costs of AOL's $800 million repurchase of its stake in AOL Europe from Bertelsmann.
The Web giant has so far restated $190 million in revenue after an internal audit. The audit is ongoing, AOL said in its filing Friday, although the company has not discovered any other items it believes require restatement.
AOL noted in the filing that it has told the SEC that it believes the disputed revenue was accounted for appropriately.
An AOL representative on Friday said the company is "continuing our efforts to cooperate with SEC as we have been all along."