SEC Sniffs Around IBM

The Securities and Exchange Commission is investigating IBM's revenue-recognition practices, possibly within its Retail Store Solutions business unit, which sells point-of-sale systems including cash registers. IBM disclosed the SEC investigation late Monday.

IBM says it received notice of a formal, nonpublic SEC investigation relating to revenue recognition in 2000 and 2001, primarily concerning certain types of customer transactions. The computer maker issued a statement saying it "believes that the investigation arises from a separate investigation by the SEC of a customer of IBM's Retail Store Solutions unit." The SEC is engaged in a "fact-finding investigation" and has not reached any conclusions, IBM said.

The company says it believes its business and accounting policies comply with all applicable financial-reporting regulations. An IBM spokesman said there is no timetable for the SEC investigation and declined further comment.