Snap launches Spectacles.com, an e-commerce site where shoppers can buy sunglasses with a built-in camera.
Overstock.com reported this month it is restating its revenue and earnings for its fiscal fourth quarter and full-year 2007 after the U.S. Securities and Exchange Commission objected to its practice of recognizing revenue upon shipment.
Off-price retailer Overstock.com Inc. reported this month it is restating its revenue and earnings for its fiscal fourth quarter and full-year 2007 after the U.S. Securities and Exchange Commission objected to its practice of recognizing revenue upon shipment. The SEC says revenue should be recognized only when products have been delivered.
Overstock said in a filing with the SEC that it would change its policy to recognize revenue upon estimated delivery date. The retailer said it would estimate delivery date based on the carrier used, whether the item is coming from a company warehouse or another company, the destination and its historical experience, which shows that deliveries typically take one to eight days.
The restatement resulted in Overstock increasing from $5 million to $13.7 million the fourth quarter revenue it deferred to the first quarter of 2008. That was less than 5% of its $300 million fourth quarter revenue. For the year, the change reduced revenue from the previously reported $768.8 million to $760.2 million. The company also deferred expenses, but not enough to offset the entire deferral of revenue. As a result, net loss for the year increased from $44.1 million to $45 million.
The company added that the change would have no significant impact on future reports as each quarter from now on would include a few days of revenue from the prior quarter and defer late-quarter sales into the following period.
The SEC imposed no penalty on Overstock, nor did it threaten any action, an Overstock spokesman says. Overstock, No. 25 in the Internet Retailer Top 500 Guide, has been recognizing revenue upon shipment since before it went public in 2002, and reporting that policy in filings with the SEC, the Overstock spokesman says. An SEC spokesman says the agency closely reviews annual reports from public companies every three years and that those reviews often prompt questions from SEC staffers about accounting policies.
The SEC outlined its policy on revenue recognition in Staff Accounting Bulletin 101, issued Dec. 3, 1999. It can be found at http://www.sec.gov/interps/account/sab101.htm.