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Who would guess that there could be an integrity issue with a company that tried to invent new accounting rules where marketing costs don't appear on the balanc
by snorkel 15y ago
Who would guess that there could be an integrity issue with a company that tried to invent new accounting rules where marketing costs don't appear on the balance sheet? You'd have a crystal ball or a brain to see this coming.
- lubos 15y agoMarketing costs are not supposed to appear on balance sheet. I don't really watch this company but if I remember correctly, their way of doing accounting was to show all received money from customers as income instead of liabilities since they were collecting half of it on behalf of vendors. They were simply inflating their revenue but it's not like it matters, because profit (loss) would be always the same regardless.
- dailyllama 15y agoHe was referring to ACSOI or whatever it was called, that tried to show profitability by subtracting out marketing costs, in a marketing-heavy organization. You're referring to Groupon's decision to treat cash they collect on behalf of merchants (which should be treated as financing cash flows) as operational cash flows, thus making their cash flow look reasonable when it's actually horrid.
- deleted 15y ago[deleted]
- rprasad 15y agoYou mean the income statement, which tracks money in and out. The balance sheet is used to track assets, liabilities, and equity.