Replies to post #353016 on Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

In response...

Didn’t they have to restate financials not once, but twice due to some creative accounting?

NO! It was only once and it was not creative accounting...

For FY 2015 (July 2016), Elite restated due to an accounting error whereby they had booked funds from Epic as common revenue (which actually created a taxable event and was not advantageous) rather than account for it as payment for R&D (as per the Elite-Epic agreement). This meant it should have been amortized over an extended period of time rather than accounted for all at once.

While it falls to the CFO to get these things right, it is also the responsibility of the independent accounting firm to ensure proper accounting. In truth, this law has been at the heart of issues for a number of companies and their accountants.