The Securities and Exchange Commission has opened up an investigation of General Electric’s accounting practices in the wake of the conglomerate’s review of its insurance business.
On Jan. 16, GE revealed it had conducted a review of its GE Capital insurance portfolio and decided to take a $6.2 billion after-tax charge in the fourth quarter of 2017, and contribute $15 billion over the next seven years to shore up the portfolio’s reserves.
The SEC is investigating both the process that led to the insurance reserve increase and the fourth-quarter charge, Chief Financial Officer Jamie Miller said Wednesday. Additionally, the SEC will look at GE’s revenue recognition and its controls for long-term service agreements.
“We are cooperating fully with the investigation, which is in very early stages,” Miller added.
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