Wednesday, January 17, 2001

Perspectives and Resolutions

What happens when you put a speaker from KPMG, Chase Bank, Brobeck Phleger & Harrison, and Draper Fischer Jurvetson Gotham Ventures on a panel devoted to "Perspectives on Implications and Resolutions of Accounting Issues Raised by e-Business?" You get three hours packed with information useful for any leading business thinker. More than 100 investment bankers, lawyers, presidents, CEOs and managers from fortune 100, private and public companies rose early to meet at Chase Bank to hear professionals' points of view on compensation, revenue recognition, income-statement presentation, capitalization and transactions in an entity's own stock.

Mario Dell'Aera, partner in charge, KPMG's New Media/Internet practice, provided opening remarks and served as a panelist. Panelists included KPMG SEC Reviewing Partner and Internet Resource Partner Chris McWilton; Brobeck Phleger & Harrison New York Business and Technology Group partner Mark Mandel; and Chase Bank Vice President and Group Manager, New Media and Internet Technology Group, David Gibbs all doled out good amounts of information for the attendees intent on knowing what to do.

Dell'Aera spoke with me afterwards to help encapsulate some of the highlights: Planning techniques and ways to address the issues, stock compensation, repricing of options and alternatives to repricing, investments and alliances or stock for service arrangements, gross versus net revenue reporting, barter transactions, and software hosting contracts. All these topics were addressed from the perspective of a private and public company, and panelists imparted the importance of understanding the ramifications of contracts you sign. Finally, Dell'Aera preached his newly coined phrase (trademark pending) "P2P" - Path to Profitability or Prepare to Pay! How you handle these questions and issues is vital to the success and profitability of your company. All these issues require close coordination with four to five parties (financial, legal-internal and external, external auditors, business development). There is no legal room in the near term future for wrong answers, and understanding these rules can help you understand business!