Groupon, Inc. (GRPN) Groupon Inc., headquartered in Chicago, IL, is a 'local commerce marketplace that connects merchants to consumers by offering goods and services at a discount'. Groupon began operations in 2008 as a private company and grew rapidly during the first few years. The Company filed its first Form S-1, the IPO prospectus, with the SEC on June 2, 2011 and successfully completed its IPO in early November 2011, selling 35 million shares at $20 per share to raise $700 million. The company's stock price, however, drifted from above $30 on November 4, 2011, its first day of trading as a public company, to under $10 within one year. In recent years, the stock price had been hovering between $3 and $6 until they conducted an unusual reverse share split (1 for 20) in June, 2020. Groupon has faced some accounting woes that arose right after it first filed Form S-1. On June 29, 2011, the SEC sent a comment letter to Groupon that presented a number of issues and inquiries about the Groupon S-1 filed on June 2, 2011. Groupon responded to the comments in correspondence dated July 14, 2011. If you are curious about the full exchange between SEC and Groupon, files can be located on EDGAR using filing type 'UPLOAD' (SEC letters) and 'CORRESP' (Company responses). Required: Obtain and read/review the following materials: o Readings on Non-GAAP earnings (under Course Readings on Blackboard) 'Companies' Non-GAAP Adjustments to Net Income have Soared', WSJ SEC Leads Crackdown on Non-GAAP Measures, CFO.com 'Companies are Winning the Battle over Adjusted Earnings, WSJ Under Assessments on Blackboard: Form S-1 filed by Groupon on June 2, 2011 Amended Form S-1 (S-1/A) filed by Groupon on November 1, 2011 The SEC's letter to Groupon dated June 29, 2011 Groupon's response to the SEC dated July 14, 2011 Groupon Q4 2020 Earnings Announcement on February 25, 2021 o Prepare a memo to address the questions below be sure to address all parts of each 3. Groupon and Revenue Presentation: One of the key comments from the SEC in its June 29, 2011 letter to Groupon involved Groupon's choice between gross and net reporting for revenues. o Compare the reported revenues, for fiscal years 2008, 2009, and 2010, in the original S-1 (June 2, 2011) and in the amended S-1 (November 1, 2011). What was the cause the changes? Did the changes have a material effect on reported revenues, cost of revenue and gross margin? Show calculations to support your conclusion on materiality. Which of the two approaches do you think Groupon preferred? Why did they prefer it? Do you agree with Groupon or the SEC on this matter? Briefly explain. O Groupon, Inc. (GRPN) Groupon Inc., headquartered in Chicago, IL, is a 'local commerce marketplace that connects merchants to consumers by offering goods and services at a discount'. Groupon began operations in 2008 as a private company and grew rapidly during the first few years. The Company filed its first Form S-1, the IPO prospectus, with the SEC on June 2, 2011 and successfully completed its IPO in early November 2011, selling 35 million shares at $20 per share to raise $700 million. The company's stock price, however, drifted from above $30 on November 4, 2011, its first day of trading as a public company, to under $10 within one year. In recent years, the stock price had been hovering between $3 and $6 until they conducted an unusual reverse share split (1 for 20) in June, 2020. Groupon has faced some accounting woes that arose right after it first filed Form S-1. On June 29, 2011, the SEC sent a comment letter to Groupon that presented a number of issues and inquiries about the Groupon S-1 filed on June 2, 2011. Groupon responded to the comments in correspondence dated July 14, 2011. If you are curious about the full exchange between SEC and Groupon, files can be located on EDGAR using filing type 'UPLOAD' (SEC letters) and 'CORRESP' (Company responses). Required: Obtain and read/review the following materials: o Readings on Non-GAAP earnings (under Course Readings on Blackboard) 'Companies' Non-GAAP Adjustments to Net Income have Soared', WSJ SEC Leads Crackdown on Non-GAAP Measures, CFO.com 'Companies are Winning the Battle over Adjusted Earnings, WSJ Under Assessments on Blackboard: Form S-1 filed by Groupon on June 2, 2011 Amended Form S-1 (S-1/A) filed by Groupon on November 1, 2011 The SEC's letter to Groupon dated June 29, 2011 Groupon's response to the SEC dated July 14, 2011 Groupon Q4 2020 Earnings Announcement on February 25, 2021 o Prepare a memo to address the questions below be sure to address all parts of each 3. Groupon and Revenue Presentation: One of the key comments from the SEC in its June 29, 2011 letter to Groupon involved Groupon's choice between gross and net reporting for revenues. o Compare the reported revenues, for fiscal years 2008, 2009, and 2010, in the original S-1 (June 2, 2011) and in the amended S-1 (November 1, 2011). What was the cause the changes? Did the changes have a material effect on reported revenues, cost of revenue and gross margin? Show calculations to support your conclusion on materiality. Which of the two approaches do you think Groupon preferred? Why did they prefer it? Do you agree with Groupon or the SEC on this matter? Briefly explain. O