Top Stories in Accounting and Finance
As it turns out, the financial statement may not be the best valuation measure for digital companies that have no physical products. Companies that lack a physical product have entirely different appearances on paper from their contemporaries, but it isn’t always a bad thing. For example, Facebook paid $19 billion for WhatsApp back in 2014 when it had no revenues or profits. Several digital companies, including LinkedIn and Twitter, reported major losses but still accomplished high valuations at the time of their IPOs.
—Harvard Business Review
JPMorgan Chase is waking up to the big market opportunity presented in the consumer payments space. According to bank-provided data, JPMorgan Chase customers spent more than $900 billion in debit and credit card volume, and $1 trillion in merchant processing volume. As CEO of Chase Merchant Services Matt Kane describes, the fintech industry in particular has shown what’s possible when design decisions inform payment products in powerful new ways.
Chatbots issuing virtual card numbers for online shoppers? That’s the word on the street from Capital One, who’s now up to speed with the likes of Bank of America and Citi who are already making use of temporary virtual card numbers for customers. The chatbot, called “Eno,” instantly generates merchant-specific virtual card numbers for those reticent to use credit or debit card information online.
The collaborative economy is booming like never before with companies like Uber and Airbnb capitalizing off the synergy of shared platforms for success. But this means a new model is in store for valuing these companies. The collaborative economy is estimated to reach a global revenue of $335 billion by the year 2025, causing significant eyebrow raising among economists who aren’t sure how to take its potential to generate revenue without a tangible product.
A new study from the University of Missouri suggests a new combination of risk factors that can determine whether executives will attempt to cook the books in accounting. Researchers of the study found that executives with “high accounting competence and compensation incentives” were 30 percent more likely to make misstatements on an audit or financial report. The third variable considered in the study is attitude which was the most variable factor.
—University of Missouri
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