Revenue Recognition at Groupon and Uber Technologies

Revenue Recognition at Groupon and Uber Technologies

By
Brandon Gipper, Jaclyn Foroughi
2020|Case No.A236| Length 28 pgs.

Groupon, a daily deals platform and Uber Technologies, a ride-hailing and delivery platform, faced a common issue related to a new revenue recognition standard (and later amendments) adopted by most public companies in 2018. The amendments were designed to help companies determine whether the nature of their obligation to customers was to provide the specified goods or services to the customer directly (acting as “principal” and reporting revenues on a gross basis) or to arrange for another party to provide them (acting as “agent” and reporting revenues on a net basis).

Learning Objective
  • 1. Understand the economics of new technology platforms that give rise to revenue recognition questions, such as “what is revenue for this firm?”
  • 2. Become familiar with required financial reporting requirements for “gross” versus “net” revenue recognition; principal versus agent considerations.
  • 3. Understand the implications of the Securities and Exchange Commission (SEC) comment process.
  • 4. Consider the potential impact of late restatements and other areas of reporting risk during an IPO.
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