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Good point. Also, aren't the vendors effectively under 'accounts payable' because Groupon doesnt have to pay them immediately? They can float that money for some 30-60 days right? I know several business that do this (including mine) and no one has objected to how are revenue is stated. not that we're IPOing anytime soon :)

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It is interesting to note some counter examples though. A real estate agent books only the commission as revenue, not the price of the property. A stock broker does the same. A delivery company that delivers something COD, also only books the fees, not the value of the goods. The question is, is Groupon acting more like a broker/agent, or are they responsible for making sure the service is rendered? It is not obvious, so there is some logic to the SEC saying Groupon should record revenue as if they are an agent/broker.

Either way, the initial comment that "OMG, Groupon are obviously crooks", is misinformed.

Groupon is handing all the money and keeping it for a significant period of time. A broker doesn't touch the transaction price.

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