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  "documentTitle": "Perion Network Ltd. (PERI)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-05-23 00:00:00",
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  "notes": "The slide uses red highlighting to draw attention to the specific text removed from the 2021 disclosure.",
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      "text": "PERI must decide if its search and advertising revenue is presented on a gross or a net basis. Presenting revenues on a gross basis would increase the size of reported revenues.",
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      "text": "The Company evaluates whether Search Monetization and Advertising Revenue should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement. Generally, in cases in which the Company controls the specified good or service before it is transferred to a customer, revenue is recorded on a gross basis.",
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      "text": "The Company evaluates whether Search and Advertising Revenues should be presented on a gross basis, which is the amount that a customer pays for the service, or on a net basis, which is the amount of the customer payment less amounts the Company pays to publishers. In making that evaluation, the Company considers whether it controls the promised good or service before transferring that good or service to the customer. The Company considers indicators such as whether the Company is the primary obligor in the arrangement and assumes risks and rewards as a principal or an agent, including the credit risk, whether the Company has latitude in establishing prices and selecting its suppliers and whether it changes the products or performs part of the service. The evaluation of these factors is subject to significant judgment and subjectivity. Generally, in cases in which the Company is primarily obligated in a transaction, is subject to risk, involved in the determination of the product (or the service) specifications, separately negotiates each revenue service agreement or publisher agreement and can have several additional indicators, revenue is recorded on a gross basis.",
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      "text": "PERI must decide if its search and advertising revenue is presented on a gross or a net basis. Presenting revenues on a gross basis would increase the size of reported revenues. There have been plenty of examples of technology companies misinterpreting, making liberal use of, or outright abusing this revenue accounting principle. A famous example is Groupon, which halved its revenue when revising from gross to net revenue.(1) In its recent 20-F, PERI dramatically curtailed its discussion of how it implements its revenue recognition. It now makes a blanket statement that it considers whether or not it controls the good or service before providing it to the customer as the main evaluation factor, and that it generally uses gross revenue. In last year's 20-F, it discussed multiple evaluation factors such as establishing prices, taking credit risk and changing the product or performs part of the service.",
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      "kind": "quote",
      "text": "\"Accounting Change Cuts Groupon's Revenue\" — NY Times, Sept 23, 2011",
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      "text": "(1) “Accounting Change Cuts Groupon’s Revenue”, NY Times, Sept 23, 2011",
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      "kind": "source-note",
      "text": "Source: 2021 20-F, p. F-16",
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      "text": "Source: 2022 20-F, p. F-15",
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      "text": "Recent And Significant Modifications Made To Revenue Recognition Language",
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