... so it could report more than $100 million in disputed construction costs as revenue, and failed to disclose the change to investors for more than a year. Of these two issues, the failure to disclose the accounting change is more serious. Failure to disclose these types of changes to investors goes against Generally Accepted Accounting Principles (GAAP), regardless of whether the changes were acceptable. However, if the changes were acceptable, why not disclose the change? FACTS OF CASE The first issue involving Halliburton is the recognition of revenue from the disputed construction jobs. Before the accounting change, Halliburton would receive most of its revenue within one year. Until 1998, Halliburton would bid on construction projects under 'cost-plus' contracts. Under these conditions, the company was able to recover from customers the cost of a project plus a certain percentage profit from gas pipelines. In 1998, the company changed from the 'cost-plus' system ...

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