City analysts who know nothing about accounts, other than looking at the bottom line? Investors spooked by other companies changing their accounts in the months before, due to actual errors, and assuming the worst?
The change was all to do with how they account for costs on new projects (such as any bidding costs, initial research into a building/surveying costs etc). Previously they accumulated the costs as capital expenses that would only be written off to the profit & loss account if that project did not go ahead. As a result of the change they now write the costs off as and when they are occurred - as a result of the change there were costs already accumulated as capital expenditure that were reanalysed as revenue expenditure, hence turning a profit into a loss.
The change in policy means that the P&L account looks less healthy, but the balance shet looks better (costs having already been written off).
This is, of course, in my opinion and based on a xmas booze affected memory!
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