In regulatory filings, the company said the restatement was partly due to its adoption of new revenue recognition principles issued by the Financial Accounting Standards Board (FASB) which changes how and when it records sales from equipment and service contracts.

Under the old rules, when accounting for the sale of a jet engine, GE’s aviation business could estimate future costs and apply a margin rate reflecting expected profitability over the life of a contract, which helped to smooth out the long-term earnings impact.

Now GE is required to recognise the financial impact at specific milestones, taking into account the actual price and manufacturing costs for the engines at those points.

In a filing GE said the new rules do not affect its cash holdings or alter the underlying economics of customer contracts, but will result in ‘significant changes in the presentation of our financial statements’.

At the beginning of the year the company revealed the Securities and Exchange Commission (SEC) has opened up an investigation into its accounting practices following GE’s announcement that it needed to pay an additional $15bn over the next seven years for legacy liabilities in its insurance business.

The SEC is looking at both the process that led to the insurance reserve increase and the fourth-quarter charge. Additionally, the regulator has said it will examine GE's revenue recognition and its controls for long-term service agreements.

Report by Pat Sweet