Hewlett-Packard Co.’s claims of financial improprieties at Autonomy Corp. have accounting experts questioning whether the allegations are an attempt to divert attention from yet another bad acquisition.
Hewlett-Packard said yesterday it recorded an $8.8 billion writedown related to its purchase last year of Autonomy, the U.K. software maker. More than $5 billion of that impairment charge was the result of accounting practices at Autonomy, Hewlett-Packard said in a statement. About $200 million of Autonomy’s revenue had been recorded prematurely or improperly, according to Hewlett-Packard’s general counsel.
Hewlett-Packard also said in its statement that Autonomy used licensing transactions with resellers to inappropriately accelerate revenue recognition “or worse, create revenue where no end-user customer existed at the time of sale.”
The world’s biggest technology companies often stumble in acquisitions because they fail to understand what they’re buying, said Stephen E. Arnold, president of Harrod’s Creek, Kentucky-based Arnold Information Technology, which advises clients on search and content processing.