World Energy Explains Financial Reporting Delay
Following the recent announcement that it was postponing reporting its fourth quarter and fiscal 2012 financial results, Worcester-based World Energy Solutions Inc. today gave details behind the delay.
The company said it's reviewing its revenue recognition policy, stemming from the October 2011 acquisition of energy management firm GSE Consulting. The review is primarily focusing on determining when revenue should be recorded for up-front commissions received from mid-market energy suppliers. World Energy said under its current reporting method, the commissions in question account for about 10 percent of the firm's consolidated revenues for the first nine months of 2012 and about 3 percent of revenues for 2011.
And under its current accounting practices, World Energy recognized the revenue as cash was received from the energy supplier. However, the firm is considering whether it would be most appropriate to record the revenues over the energy flow period, similar to its other retail electricity product lines or whether it should be deferred to the end of a contract period.
Regardless of the timing of revenue recognition, there would be no impact on the cash received by the company.
World Energy said it may file for an extension of its March 31 filing deadline as it continues to analyze more than 3,000 accounts.
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