Shares at Boeing are tanking after the US Securities and Exchange Commission (SEC) announced that it was investigating the accounting practices at Boeing Commercial Airplanes.
The investigation is in respect to the company’s 787 Dreamliner and 747 jumbo jet programs.
According to Bloomberg‘s Robert Schmidt, Julie Johnson and Matt Robinson, people with knowledge of the matter said that the SEC is looking into Boeing’s projections for the long-term profitability of the two airplanes.
Shares at Boeing were trading down 11.07% as of 11:39am EST.
The Bloomberg report says the issue lies with a form of financial reporting called program accounting which allows Boeing to spread the costs of building its planes over a number of years.
That type of accounting is allowed by the SEC, specifically in the aerospace industry, however, the report says Boeing is using that practice to obscure potential losses, which is not allowed.
The SEC isn’t saying at this time that Boeing violated any accounting practices, only that it is taking a close look at the company’s accounting practices.