ACTG 630 – Case Assignment
Due: Wednesday, December 3
Please submit one assignment per group. No more than 3 students per group.
Read “Growing Pains at Groupon” by Dutta, Caplan and Marcinko (2014) and complete the questions included in the Case Requirements section (beginning on page 238).
Instructions for accessing the FASB Codification database:
1. Go to http://aaahq.org/ascLogin.cfm
2. User ID: AAA51526
3. Password: x43AYtX
ISSUES IN ACCOUNTING EDUCATION
Vol. 29, No. 1
2014
pp. 229–245

American Accounting Association
DOI: 10.2308/iace-50595

Growing Pains at Groupon
Saurav K. Dutta, Dennis H. Caplan, and David J. Marcinko

GROWING PAINS AT GROUPON

A

s an undergraduate music major at Northwestern University, Andrew Mason eagerly
(Groupon 2012b, 23)
1

For additional background information on Groupon, see Steiner (2010), Carlson (2011), and Stone and
MacMillan (2011).

Issues in Accounting Education
Volume 29, No. 1, 2014

Growing Pains at Groupon

231

FIGURE 1
Groupon’s Stock Price Chart

REVENUE RECOGNITION
Sale of products to customers prior to purchase by the vendor/retailer is a common business model for ‘‘e-tailers’’ such as Expedia and Priceline. These vendors provide a platform for exchange of goods, but do not necessarily transact in those goods. When the customer makes a purchase through an e-tailer’s platform or interface, the e-tailer takes the payment from the customer and places an order with the supplier to send goods directly to the customer. At a later date, it remits a payment to the supplier for the prearranged price. Like a traditional business, the e-tailer retains the difference between the payment received from the customer and the payment it makes to the supplier. However, unlike a traditional merchandiser, the e-tailer never takes possession of the merchandise. The manner in which these transactions are recorded has significant impact on the financial statements. There are primarily two ways of recording the transaction: on a ‘‘gross’’ or ‘‘net’’ basis.