SolarCity restating 2012/2013 results, delaying 10-K filing

|About: SolarCity Corp. (SCTY)|By:, SA News Editor

After talking with accountant Ernst & Young, SolarCity (SCTY -2.3%) has decided to restate its results from Q1 2012 to Q3 2013 due to "an error in the allocation of overhead expenses." (8-K)

The company plans to "recognize a downward adjustment of assets related to solar energy systems leased and to be leased and an upward adjustment to the costs of solar energy system sales" for the aforementioned timeframe.

In addition, SolarCity, which had previously planned to release its full Q4 results today - a business update was provided a week ago - now says it's delaying the filing of its 2013 10-K.

Deutsche (Buy) thinks "evidence of ineffective internal controls" and the delayed release of Q4 results will worry investors over the near-term. But it also points out there will be "no change in total overhead" in the restatement, only "a shift in how it is allocated."

The firm adds SolarCity still expects its next offering of solar asset-backed securities to arrive in late Q1 or early Q2.