AOL Pays Millions in Accounting Mishap
On Monday, America Online agreed to pay $3.5 million in civil damages based on improperly accounting for advertising revenues. The case also marks the first time the Securities and Exchange Commission has levied its power on a public company for capitalization matters.
The case dates back to profits in six of eight quarters during 1995 and 1996 that were listed as deferred revenue instead of associated with acquiring new customers to use company services.
Analysts say the action taken by the SEC clearly says that anyone conducting business via the Internet should prepare their financial statements in present scenarios rather than basing the reporting on the future.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.