Intermediate Accounting Research paper Example | Topics and Well Written Essays - 3000 words

Intermediate Accounting - Research Paper ExampleThe following illustration provides a simplified view of the line model followed by Groupon resemblance of this business model of Groupon with Wal-Mart reveals some fundamental differences in the approach followed by the two businesses. First of all, as menti integrityd earlier, the virtual operating style of Groupon through lucre is a primary factor which distinguishes the extent to which both companies can target their respective customers. Based on the differences identified in the business model for Groupon in comparison with the approach followed by Wal-Mart, it is possible to determine how these differences influence the risks identified by Groupon in its financial statements under management discussion and analysis and besides the translation of these risks into financial reporting of the high society. Before initiating a discussion as to how risks faced by Groupon would influence its business model, it is pertinent to under stand that the success of the business model of the company largely rests on the revenue generating ability of the company through acquiring new subscribers to purchase coupons offered by the company. Since the company has only one product to offer, i.e. coupons, therefore any unfavourable changes in the circumstances may eventually lead to the disruption of whole business model. First of all, the company has expressly stated in its Form S - 1 that, We may non maintain the revenue growth that we have experienced since inception. (Groupon Incorporation 11). Although, the company would take a leak measures to ensure that such a risk may not materialize in future however, if such a situation is faced by the company where revenue growth becomes difficult, the business model may be affected severely, as there is no contingency plan for the company due to wishing of its diversity in operations. Realizing the significance of influence this risk may have on the business model of the comp any, it has been mentioned that, If we fail to retain our existing subscribers or simulate new subscribers, our revenue and business will be harmed. (Groupon Incorporation 12). In addition to this, it is also important to note that apart from growth in subscribers to the business, the property and growth of merchants for the business is also a risk factor. The company has expressly stated that if it fails to retain or grow the number of merchant it deals with, the revenues may slim down considerably in the future and therefore place impact on the whole business (Groupon Incorporation 13). Apart from this, it is also pertinent to understand that Groupon is not alone in its market in fact there are other competitors who are improving their customer base and market standing. The company, in this regard, states that it operates in a highly competitive environment where competitors may pose a significant threat to the operations and growth opportunities for Groupon in the future (Group on Incorporation 13). Issues regarding tax income Recognition for Groupon The table presented as follows include information pertaining to revenues, cost of sales, other operating expenses and net profit / loss of the company for the financial years 2009 and 2010. on a lower floor each year, both gross and net based revenue recognition by the company has been presented so as to make the comparison possible in the midst of