Builder Galliford overstated net assets by $120 million - watchdog

LONDON (Reuters) - Construction company Galliford Try overstated its net assets by 94 million pounds ($120 million) in 2018 and its accounts have been restated, Britain's audit watchdog said on Thursday.

The Financial Reporting Council (FRC) said it had raised a number of issues with the company, including the recognition of revenue on construction contracts, and the classification of certain cash flows in its cash flow statement.

"The FRC found that Galliford Try overstated its revenue in 2018, which the company has now corrected," said David Rule, the FRC's executive director of supervision.

"We will continue to hold companies to account when they do not comply with the requirements of relevant financial reporting standards," Rule said.

Galliford said it has worked closely with the FRC and because of the actions the company took, the watchdog had concluded its review.

"The company has already complied with the amendments that we agreed with the FRC and we maintain our commitment to transparent reporting of our financial statements," Galliford said in a statement.

The FRC said the company should not have recognised an 80 million pound claim recoverable from the customer for a Scottish road contract.

The total effect of all the errors identified was to overstate net assets by 94.3 million pounds at June 30, 2018, the FRC said.

Following corrective action taken by the company, the FRC said it how regarded its inquiries as concluded.

Galliford reported earnings on Thursday.

($1 = 0.7808 pounds)

(Reporting by Huw Jones, editing by Sinead Cruise and Mark Potter)