Shares in Webjet have fallen after the online travel agency flagged an accounting dispute that could hurt its full-year earnings.
Webjet told the ASX on Friday that it has a disagreement with its auditor BDO over the way it accounts for transactions linked to its supply agreement with tour operator Thomas Cook.
Webjet's board has rejected BDO's advice and the company says it now expects its end-of-year auditor's report to come with a qualification.
The company said if it were to adopt BDO's proposed accounting treatment, it stands to lose $11.5 million in earnings before interest, taxes, depreciation and amortisation for the year to June 2017.
It would also have to reduce the carrying value of intangible assets by $32.7 million.
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Shares in Webjet were down $1.00, or 7.9 per cent, at $11.67 by 1128 AEST amid a market-wide sell-off.
A statement from Webjet said BDO has previously reviewed and approved the company's accounts for the six months to December 31, 2016, but now the auditor "no longer agrees with the accounting treatment" of the Thomas Cook deal.
"Webjet notes that this technical accounting matter does not in any way change the cash flows or economics of the Thomas Cook arrangements," it said.
Webjet partnered with the London-based tour operator in August 2016, giving its hotel business access to another 3,000 hotels across Europe.
The company reaffirmed its full-year earnings guidance of $80 million, saying the guidance was based on BDO's treatment of its half-year accounts.
Webjet is due to report its 2016/17 results on August 31.
