Long before it had closed on the acquisition of certain music catalogs Reservoir Media (RSVR), a music publisher, recognized uncollected royalties as revenue. Instead, Reservoir should’ve accounted for pre-acquisition royalties as purchase price reductions of the acquired music catalogs.

The company’s 2021 financial statements— littered with accounting errors impacting revenue and net income— have now been corrected for the nine months ended December 31, 2021.

The revisions reveal Reservoir Media:

—Overstated revenue by $1.56 million, or 2.14%
—Overstated operating income by $1.49 million, or 13.96%
—Overstated net income by $1.12 million, or 26.85%

Reservoir also overstated operating cash flow by $1.56 million, or 12.14% in the period. The company revised its balance sheet as well, revealing it also overstated total assets and shareholder equity.