No One-Size Revenue Accounting for All App-Based Companies

There isn’t a one-size-fits-all revenue accounting formula for platform-type companies whose apps connect customers to deliver takeout or offer taxi rides.

There may be subtle, but important, differences in the business models of seemingly similar app-based companies. The differences affect accounting, and can lead to companies reporting different top lines in their income statements, Securities and Exchange Commission Corporation Finance Chief Accountant Lindsay McCord said Tuesday.

“Often I hear, ‘Well, this company, you let go over here is following this revenue recognition policy, but you’re still tying me up’,” McCord said at a Workiva Inc. conference. “Often the people ...