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I don't mean to diminish accounting as a discipline. I'm sorry if I came across that way. My point was that the cash position doesn't reflect real revenue unt
by sunchild 15y ago
I don't mean to diminish accounting as a discipline. I'm sorry if I came across that way. My point was that the cash position doesn't reflect real revenue until the contingency is cleared. At best, you can "gamble" with the money while you have it.
- jacques_chester 15y agoI only did one unit of accounting to see what the fuss was about. Quite enlightening really. Cash positions are a different beast from revenue -- and indeed that's why Income Statements (aka P&L) and Cashflow Statements are both produced -- to give that two-way perspective on a business, along with the Balance Sheet. All three are connected and you can, given a sample, derive them from each other. But to understand how a business is behaving you need to study all three. That being said, accounting is all about devilish details. If Groupon are booking their revenue as being immediate upon the deal, rather than a subscription style cash+liability, then they can make quarterly revenue appear much higher than it might otherwise be seen as in retrospect.
- sunchild 15y agoI reiterate: if you treat the proceeds as revenue before the contingency is lifted, you are effectively gambling with the funds.
- jacques_chester 15y agoSure. If they're doing that, I'd be tempted to call shennanigans.