The Securities and Exchange Commission has asked that reporting standards for online businesses be tightened up, the Wall Street Journal reported last week. Many e-businesses are reporting assets that are questionable, such as income that is really a "free" service offered to customers or including bartered advertising exchanges as a revenue source.
Companies have few accounting rules governing revenue recognition on financial statements, according to the article. It quotes a report by James Marks and Lise Buyer, Internet analysts for Credit Suisse First Boston, saying changes "could lead to reductions in reported revenues for these (Internet) companies."
At last report, the Financial Accounting Standards Board has postponed
work on the subject.