Sohar says differing interpretations of lease revenue recognition behind violation
Oman's Sohar Power says CMA asks it to restate 2016 earnings
Oman's capital markets regulator has instructed Sohar Power Company to restate its 2016 accounts due to differing interpretations of lease revenue recognition in previously filed earnings statements.
"This decision has arisen because the company accounts for 2016 were qualified by the external auditors due to a differing interpretation of the lease revenue recognition policy in its audited accounts," the company said in a regulatory filing with the Muscat Securities Market.
"Historically, the company has consistently applied its interpretation of the lease revenue recognition policy in its audited accounts. The company is seeking legal advice with regard to its right to appeal against the decision and will continue to engage with relevant regulatory authorities."
Sohar said it received the decision issued by the executive president of Oman's Capital Market Authority on 23 August. In its communication, the CMA warned the company that it was in violation of Article 5 of the Capital Market Law and asked it to restate its 2016 in order for it to be compliant with International Accounting Standards. The decision can only be enforced once the company's right of appeal is enforced.
No one immediately answered calls made to Sohar. The company did not respond to requests for comment made via email.
Power projects are on the rise in Oman. Masdar, the Abu Dhabi-based renewable energy company, earier this month signed an engineering, procurement and construction contract with a group of companies that include GE and Spain TSK to build a wind farm in Oman, the first large scale project of its kind in the Gulf.
Energy consumption in Oman is expected to increase to 47 terawatts per hour (TWh) in 2021 from 25 TWh in 2014, according to a report by the Oman Power and Water Procurement Company.