RJH writes...

Today's change of accounting policy is welcome even if the "business has evolved" justification is implausible: never has necessity more been the mother of invented spin. At least the communiqué was less guarded and opaque than has been the norm.

The long anticipated restatement will likely show breakeven or losses at the operating level since 2003 with backed out revenues pushed forward up to 2010. The restated revenues all appear to carry product licence margins of circa 90%.

Which raises an interesting issue: it is clear the previous accounting regime did not, as last year's Annual Accounts asserted boldly, align performance bonuses and shareholders interests. These bonuses were paid based on earnings per share and normalised profit before tax: and both measures were in prior years grossly inflated by the incorrect recognition of tens of millions pounds worth of 90% margin product licence revenues.

The board has the chance to do the right thing and truly demonstrate alignment of their and shareholders'’ interests by renouncing these "performance" bonuses as wrong.

Repay the money.

The writer owns iSoft equity.

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