Vodafone Explains Accounting Practices

Vodafone Group, Europe’s biggest mobile-phone company, said its accounting methods sometimes lead to booking 100% of revenue in transactions in which part of the amount is shared with third parties.

Vodafone in some cases booked all the revenue from wireless Internet services as sales even when a portion was paid to third parties as part of content-sharing agreements, the Financial Times reported, citing the company.

Vodafone said it looks at every revenue-sharing agreement on a case-by-case basis and listed payments to third parties as revenue only when it collected payments from mobile-phone users, the newspaper said.

The accounting practice complies fully with British standards, Vodafone said.

At the company’s annual meeting, Chairman Ian MacLaurin complained that media reports have given a misleading view of the company’s finances and performance. He said reports comparing the mobile-phone company to WorldCom Inc. and Enron Corp., which both sought bankruptcy protection, were “odious.”