Alibaba Group Initial Public Offering: A Case Study of Financial Reporting Issues ABSTRACT: In September 2014, the Chinese e-commerce giant Alibaba Group Holding Limited issued shares on the New York Sbck Exchange, making it the world's largest initial public offering. This case examines different aspects of the Alibaba Group's initial public offering, including Alibaba Group's business model, financial reporting and corporate govemance, as well as the macroeconomic, political, and legal environment in which the company operates. In addition, this case will familiarize students with the risks and opportunities for Chinese companies and investors when a Chinese company lists in the U.S. This case is suitable for fnancial accounting and intemational accounting courses at the intemediate and advanced levels for undergraduates as well as graduate students. The case is scalable, and instructors can choose from multiple sections of the case and different case questions b tailor the case difficulty to their students' leaming needs. Keywords: Alibaba Group Holding Limited; initial public offering; variable interest entities, equity investment financial statement analysis. INTRODUCTION n September 19, 2014, Alibaba Group Holding Limited (Alibaba Group, the Chinese e-commerce giant founded in 1999. had an initial public offering (IPO) of American depository shares at S68 per share on the New York Stock Exchange. Based on this offering price, this deal raised S25 billion for Alibaba Group, making it the world's largest IPO (Barreto 2014). The scope of Alibaba Group's IPO has drawn particular attention to the risks and opportunities of investing in this company as well as other U.S.-listed Chinese companies. This case will first provide a brief background on Alibaba Group, and then explore important aspects associated with its IPO in the U.S. Corporate Overview Since the launch of Alibaba.com in 1999 by Jack Ma in his apartment in Hangzhou, China, Alibaba Group has established a portfolio of companies operating in wholesale and retail online marketplaces as well as Intemet-based businesses offering advertising and marketing services, electronic payments, cloud-based computing, and network services as well as mobile solutions. Alibaba Group has developed an ecosystem around its platform that consists of buyers, sellers, third-party service providers, strategic alliance partners, and investee companies. Table 1 shows important milestones in Alibaba Group's history (http://www.alibabagroup.com/en/about/history)