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Accounting News Roundup: Groupon’s New Revenue Numbers; Audit-only Firms in the EU?; IRS vs. Banks Over Foreign Credits; | 09.26.11

Groupon IPO: Revenue Corrected for ‘Error’ [WSJ]
Now, what Groupon counts as “revenue” is the amount of money it takes in from the daily-deal offers, MINUS the money Groupon shares with merchants. Before, the revenue number included the merchant’s share of money in the company’s revenue figure. “We consistently have stated that the amount we retain—rather than bill or collect—from the sale of Groupons is the key measure of the value we create,” Groupon said in its amended IPO filing. “This change in presentation is consistent with that belief.”

Were Groupon’s and Overstock’s Management and Auditors Stupid or Did They Condone Improper Accounting Practices? [WCF]
Sam Antar: “I believe that the managements of both companies simply chose to avoid following applicable accounting rules and their auditors condoned those practices. Seriously, can they be so stupid? If so, their audits are nothing but window dressing.”

Groupon: Restated Numbers Reveal Failure of Business [Fraud Files Blog]
And Tracy Coenen: “By reporting revenue properly (much smaller revenue numbers!), Groupon’s precarious financial position and operating strategy are exposed. Simply put: The business of Groupon does not work. And I suspect that merchants and consumers are losing interest in the Groupon type of gimmick, which puts even more financial strain on the company.”

EU to propose audit-only firms and mandatory rotation [Accountancy Age]
New European regulation looks set to turn auditing upside down, potentially forcing the biggest firms to choose between audit and non-audit services and ushering in mandatory rotation. A draft of the European Commission’s green paper on audit seen by Accountancy Age indicates a tough line is being pursued by internal markets commissioner Michel Barnier.

Facebook ‘Likes’ Small Business [WSJ]
In a push to gain more small-business users, Facebook Inc. is expected on Monday to reveal plans to launch a new program that includes giving away $10 million of advertising credits. The initiative is being launched in partnership with the U.S. Chamber of Commerce and National Federation of Independent Business, a small-business group. It is intended to educate small businesses on how to promote themselves on the social-networking site, like buying display ads targeted to specific markets, but also through cost-free measures to engage more with customers.

Shutdown looms: Spotlight now on Senate after Boehner wrangled House GOP votes [WaPo]
With time running out, Congress returns Monday to try to pass a short-term funding measure to avert a government shutdown and avoid yet another market-rattling showdown over the federal budget. The Democratic-led Senate, which on Friday blocked a GOP House measure to fund the government through Nov. 18, will vote late Monday on its own version of the bill.


US tax authorities target bank deals [FT]
US tax authorities are targeting cross-border finance deals worth billions of dollars between leading US and UK banks as they step up efforts to clamp down on abusive tax avoidance, a joint investigation by the Financial Times and ProPublica, a non-profit news organisation, has found. Four US banks – BB&T, Bank of New York Mellon, Sovereign (now part of Santander of Spain), and Wells Fargo – are in turn suing the US government over more than $1bn in tax credits that the Internal Revenue Service has disallowed over the past decade. Washington Mutual has settled a similar dispute and Wachovia is pursuing an administrative complaint over a deal. The UK’s Barclays emerges as a pivotal promoter of the complex cross-border deals, which the IRS claims were designed to generate artificial foreign tax credits.

Crocs to Counter Slowdown With New Styles [Bloomberg]
Crocs Inc. (CROX) plans to counter any global slowdown by pushing consumers to shift to new, higher- priced shoe styles from the plastic clogs for which it’s better known, Chief Executive Officer John McCarvel said. “Our whole desire is to go upscale,” McCarvel said in an interview at the World Retail Congress in Berlin today. “This is many years in the making. It has evolved constantly, upgrading the line, trying to stretch the consumer up to 40, 45 euros, pounds or dollars.”

KPMG LLP Names Lynne M. Doughtie Vice Chair – Advisory [KPMG]
Replacing Mark Goodburn who’s now the global head of advisory.

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