Revenue or income? Accounting Error at WH Smith Plc explained.
WH Smith’s disclosure of accounting errors has wiped nearly £600mn off its market capitalisation.
"Write what you know. That should leave you with plenty of free time."
Past week Financial Times wrote about accounting errors disclosed by WH Smith Plc, a UK-based travel retailer, which led to drop in their market cap by around £600 million. FT did not omit to mention how Big 4 (again) might have done a poor job.
One thing caught my attention immediately.
The article was using terms "income from supplier promotions" and "revenue" as synonyms (and thus wrongly).
As an accounting (or was it annoying?) "know-it-all" (in German "Besserwisserin"), I could not resist commenting on the article (FT did not reply - yet 😅).
For my fellow accounting nerds I am sharing a simple break-down of the issue in my signature, easy-to-read way.
headline quote by Howard Nemerov, US-American poet
