'Value' of Dotcoms Complicated
Hardly. Accountants who specialize in business valuations are discovering it's a whole new ball game when figuring how much a business is worth that deals in the virtual sector.
Just a few of the measurable aspects of dotcoms include investment capital, Web site users and revenues, although it is difficult to determine how income relates to expenses.
Perhaps, though, a greater concern is how online companies report revenues--should they be reported on a 'net' basis or 'gross' basis? There also is the issue of fulfillment costs; some companies are showing these costs as a component of marketing when they might be better suited as an offset of gross profits.
The SEC made public its concerns at the end of last year when it began looking at such popular online businesses as Amazon.com.