Research topic: Be alert for suspicious revenue from transactions with joint venture partners

In some cases, Iconix would create the customers that would buy these regional trademarks. In 2013, for example, it formed a 50-50 joint venture with supply-chain partner Li & Fung and transferred several trademarks to this JV. Iconix claimed not to control this JV (despite it being named Iconix SE Asia), and therefore was also able to record these trademark transfers as part of its total sales. The company disclosed in its September 2014 filing that sales to this JV alone had generated $18.7 million, which accounted for 16 percent of its total revenue for the quarter - essentially out of thin air!