Groupon Filed Its Original S 1 Form For Register As A Publicly Traded Company

816 Words Apr 6th, 2016 4 Pages
On June 2, 2011, Groupon filed its original S-1 form to register as a publicly traded company. The company’s income statements for 2009 and 2010 reported revenue of $30.4 million and $713.4 million respectively. In a footnote pertaining to revenue recognition, the company stated, “The company records the gross amount it receives from Groupons, excluding taxes where applicable, as the company is the primary obligor in the transaction.” The SEC scrutinized Groupon’s decision to classify itself as the primary obligor in its business transactions as well as the company’s use of gross reporting for revenue, citing issues with compliance to ASC 605-45-45. After numerous attempts to refute the SEC’s claims that Groupon had not used the appropriate revenue recognition method in its reports, the company published an amended S-1 filing on October 7, 2011. The first major change in the amended filing was a footnote on revenue recognition, which stated, “We record as revenue the net amount we retain from the sale of Groupons after paying an agreed upon percentage of the purchase to the featured merchant excluding any applicable taxes. Revenue is recorded on a net basis because we are acting as an agent of the merchant in the transaction.” The second major difference in the amended filing was found in the income statements for 2009 and 2010. Revenue for the first year had been restated from $30.4 million to $14.5 million (-52.3% change). For the following year, the figure for revenue had…

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