One of the key comments from the SEC in its June 29, 2011, letter to Groupon involved
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Question:
One of the key comments from the SEC in its June 29, 2011, letter to Groupon involved Groupon's choice between gross and net reporting for revenues.
Compare the reported revenues, for fiscal years 2008, 2009, and 2010, in the original S-1 (June 2, 2011) and in the amended S-1 (November 1, 2011). What was the cause the changes? Did the changes have a material effect on reported revenues, cost of revenue and gross margin? Show calculations to support your conclusion on materiality.
Which of the two approaches do you think Groupon preferred? Why did they prefer it? Do you agree with Groupon or the SEC on this matter? Briefly explain?
Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
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