UPDATE 1-Taleo to defer $18 mln revenue, restate results

* To defer $18 mln consulting services revenue

* Says deferred rev less than 4 pct of total rev recognized

* Says restatement will not impact total rev under contract

March 23 (Reuters) - Software company Taleo Corp TLEO.O said it would defer about $18 million of consulting services revenue recognized through June 30, 2008 to future periods and restate results, after completing a review of its revenue recognition practices.

The company would restate financial statements for the years ended Dec. 31, 2003 through 2007, and the interim financial statements for the quarters ended March 31, 2008, and June 30, 2008, it said in a statement.

The revenue deferred beyond June 30, 2008 represents less than 4 percent of total revenue recognized over the restated period, Taleo said.

The company recognized about $85 million in consulting revenue and $378 million of application revenue during the restated period.

The restatement will not impact total revenue under contract or cash flow from operations, it said.

Taleo would now recognize consulting services revenue over the term of the application services agreement, typically three years, instead of recognizing it as the services were delivered.

The company would file its 2008 annual report by April 30.

Shares of the company closed at $12.16 Monday on Nasdaq. (Reporting by Deepti Govind in Bangalore; Editing by Ratul Ray Chaudhuri)