Today in accounting-sleight-of-hand news, medical device maker NuVasive Inc. announced that its first quarter profits doubled thanks largely to an accounting policy change:

The company said its profit more than doubled to $2.4 million, or 6 cents per share, from $1.1 million, or 3 cents per share. Excluding one-time items like non-cash stock-based compensation expenses, amortization costs, and intellectual property litigation charges, NuVasive said it earned 24 cents per share. The accounting change added 2 cents per share to both measures of profit. Revenue increased 14 percent, to $124.5 million from $109.1 million.

What exactly was this accounting rule switcheroo? A change in the way it “accounts for the value of loaned instruments” that will be paying off in spades for the rest of this year and into the future!

NuVasive said it changed the way it accounts for the value of loaned instrument sets that went into service before Jan. 1. The change is expected to add 8 cents per share to its annual profit. It also said lower tax rates will add 4 cents per share to its annual profit, and greater-than-expected revenue will contribute a penny per share.

The company said it now expects an adjusted profit of $1.20 to $1.23 per share in 2011, with $530 million to $540 million in revenue. Previously NuVasive called for a profit of $1.07 to $1.10 per share and $525 million to $535 million in revenue.

Accounting change lifts NuVasive 1Q profit [AP]
Underpants Gnome Accounting of the Day: CapitaLand Ltd.