Groupon's $835 million accounting oopsie

Groupon's IPO paperwork offered the first public glimpse into the financials of a company eye-popping growth: In an August filing, Groupon reported its revenue for the first six months of 2011 at $1.5 billion, up from a grand total of $94,000 just three years earlier.

Turns out Groupon was being extremely generous in its definition of "revenue." If Groupon sells a coupon for $10, it would typically pass $5 of that on to the merchant -- but Groupon had previously been reporting all $10 as its own revenue. The SEC smacked Groupon and called that a no-no.

In September, Groupon submitted a revised filing to "correct for an error" -- namely, including in its revenue the cash it has to hand back to merchants for their share of the coupons Groupon sells.

The restatement effectively whacked Groupon's sales in half, knocking them down to $688 million for the first half of 2011. Groupon's net loss for the period: $255 million. -- Julianne Pepitone


@CNNMoney - Last updated December 20 2011: 1:40 PM ET
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