Video: Pre-IPO accounting questions swirl around Groupon

msnbc.com
updated 7/27/2011 1:16:04 PM ET 2011-07-27T17:16:04

Groupon's hotly anticipated initial public offering of stock could be delayed until mid- to late-September as federal regulators have raised questions about the company's self-selected financial metrics, CNBC reported Wednesday.

Groupon, which registered with the Securities and Exchange Commission last month to go public, has several unique ways of measuring its success that have drawn scrutiny from some investors and now federal regulators, CNBC reported.

For example, Groupon reports non-standard financial metrics such as gross profits, a way of measuring its revenue, and "adjusted consolidated segment operating income," a measure that excludes certain expenses.

The SEC review process, which normally takes two or three months, is likely to take longer in Groupon's case. Groupon reportedly already has filed an amended S-1 document, the basis for its prospectus, incorporating suggestions from SEC officials.

Groupon's initial S-1 includes its financial results based on generally accepted accounting practices, but the SEC wants to make sure the document also includes the proper tone and emphasis, CNBC said.

In a letter introducing the registration statement, Groupon CEO and founder Andrew Mason boasted that the company is unusual and added: "We don't measure ourselves in conventional ways."

He specifically pointed to gross profit and adjusted consolidated segment operating income, two of the areas under scrutiny.

Groupon could raise up to $1 billion in an IPO that could value the company at up to $10 billion, according to latest reports.

Related: 6 reasons not to buy Groupon stock

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