Now Publicis Groupe is embroiled in accounting row

There’s never a dull moment at Publicis Groupe: now the French marcoms giant is embroiled in a row with French shareholder group Gouvernance en Action, its director Fabrice Remon and French magazine L’Obs over the accounting treatment of €130m in cash and €20m in software credits.

This is compensation for an IT contract with German firm SAP that went awry.

Remon says:”Publicis had to treat these 130 million as an exceptional product because it is non-recurring, and does not come from contracts won in the course of its operations.” Publicis however booked it as operating income and write-downs, with the agreement of its auditors.

At the time Publicis was struggling, with organic growth grinding to a halt. The accusation is that this non-operating windfall made its numbers look better.

Publicis says: “The compensation received by Publicis Groupe was allocated in Publicis Groupe’s accounts in part to the reduction of the book value of the balance sheet assets corresponding to the project, in part to the neutralization in the 2014 income statement of the extra costs incurred as a result of the delays, and in part to cover forecasted extra costs in the coming years as a result of the delays known by the Group.

“This accounting treatment has been validated by Group’s auditors, who confirmed that it was not necessary to mention this information in the notes to the financial statements relating to 2014 accounts nor in the annual report.

“The Group communicated all this information to Mr. Fabrice Remon as well as the journalist of L’Obs who questioned us in this respect. We reserve all our rights for any damages that such publications may have on our stock price, the company or our shareholders.”

So we’d better watch it then. These things can occur when a company is being run “hot,” as Tesco was in the Philip Clarke era, with all eyes on the share price.

You May Also Like

publicis groupe

About Staff

352 Shares
Share
Tweet
+1
Share
© Copyright 2013 More About Advertising, All Rights Reserved. With help of WPWarfare.com. | Cookies explained.