Red Hat warned investors Tuesday that it will restate three years' worth of financial results to reflect a change in how it accounts for subscription revenues. Red Hat said that although the change won't affect the total revenue ultimately collected by the company, it will shave the vendor's reported sales and profits over the last few years.Red Hat\u00a0warned investors Tuesday that it will restate three years' worth of financial results to reflect a change in how it accounts for subscription revenues. Red Hat said that although the change won't affect the total revenue ultimately collected by the company, it will shave the vendor's reported sales and profits over the last few years.Raleigh, N.C.-based Red Hat sells several products, including its flagship Red Hat Enterprise Linux, on a subscription basis. Until now, it has recognized that revenue on a monthly basis, booking the first one-twelfth of the revenue from an annual contract in the month in which the subscription commenced.In June, the company's auditor, PricewaterhouseCoopers, recommended Red Hat change its model to recognize subscription revenue on a daily basis. The net effect of the change is to postpone some revenue previously recognized in a contract's first month into the contract's last month.That change will reduce the $126.1 million Red Hat initially reported in 2004 revenue to something in the range of $123.8 million to $124.8 million. (Red Hat is still working to finalize its restatements.) Net income for the year will drop from $3.2 million to no more than $2.9 million.Red Hat's restated 2003 and 2002 fiscal years will also see slightly wider net losses and lower revenue, with revenue dropping at least $626,000 in 2003, and dropping in the range of $10,000 to $610,000 in 2002.Red Hat CEO Matthew Szulik said in a prepared statement that the change "is not expected to reflect any material difference in the meaningful historical trends of our business."Still, Wall Street reacted badly to news of the restatement, shaving 17% off Red Hat's share price in morning trading on the Nasdaq exchange.Red Hat took a beating from the financial community last month, when the company fell slightly short of analysts' first-quarter revenue expectations just days after announcing its chief financial officer's departure.Red Hat's accounting change could slightly up its first-quarter results: The company originally reported revenue of $41.6 million for the three months ended May 31, but now expects revised revenue in the range of $41.2 million to $41.7 million.