This case provides an opportunity to review Groupon Inc’s S1 filing made prior to an initial public offering. Groupon’s financial statements attracted a great deal of controversy due to revenue recognition policies that produced substantially higher revenues for the corporation, as well as non-GAAP earnings measures, especially ACSOI — an invention of the firm that served to exclude certain marketing expenses from the calculation of profit. Since marketing expenses were a very material expense for Groupon at a stage at which it was building its business, the effect of the use of ACSOI was as substantial as the effect of aggressive revenue recognition policies. Groupon backed down on both revenue recognition and the use of ACSOI following SEC inquiries into the corporation’s accounting policies.

Groupon provides an opportunity to review Groupon Inc's S1 filing made prior to an IPO. Groupon's financial statements attracted a great deal of controversy due to revenue recognition policies that produced very substantially higher revenues for the corporation, as well as non GAAP earnings measures, especially ACSOI, an invention of the firm that served to exclude certain marketing expenses from the calculation of profit. Since marketing expenses were a very material expense for Groupon at a stage at which it was building its business the effect of the use of ACSOI was as substantial as the effect of aggressive revenue recognition policies. Groupon backed down on both revenue recognition and the use of ACSOI following SEC queries as to the corporation's accounting policies.