Elon Musk has given Twitter employees an ultimatum – work ‘long hours at high intensity’ or resign. This kind of thing might work at Tesla where the mission purpose is linked to mankind’s survival but isn’t Twitter’s purpose to spread memes? Even mayonnaise brand Hellman’s has a bigger purpose – ‘reduce food waste by making leftovers tasty’. Personally, I’d be more motivated to pull double shifts at the mayo factory. Spread mayo not memes.

The lowdown

• 🐦 Elon Musk requested employees to ‘work long hours at high intensity’ as he searches for a new Twitter CEO.

• 💄Estee Lauder purchases Tom Ford in $2.8 billion deal.

• 💲 Coinbase CFO says the full contagion from the FTX collapse has not yet been seen.

Flex your finance muscle 💸💪

Yesterday we wrote about e-scooter rental company Bird’s plan to recognize revenue from funds held in users’ wallets where it does not expect to have to provide a ride in exchange for and does not have to return. This is known as:

Breakage💰

Breakage is revenue recognized through an extinguishment of a liability relating to certain stored-value products. In simple terms, it is revenue gained through unredeemed gift cards or other prepaid services that are never claimed.

For example, a customer may have a $50 card, use $48 of value on the card and then lose the card. The company would initially have a $50 liability equal to the card’s value. When the customer uses the card, $48 is removed from liabilities and recognized as revenue. At some point in the future, perhaps after an analysis like the one Bird is doing, it may choose to also recognize the $2 on the assumption that it will never be used.

Breakage is a topical issue right now, with a group of unions asking the SEC to investigate Starbucks’ breakage practices.

Here is a link to the FASB accounting standards update that deals with when this can be done.

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Former EY partners want a piece of the pie

In a leaked memo, first published by the FT, more than 150 former EY partners have written to the firm’s leadership to provide their “reaction” to the proposed split. The memo raises four main issues which can be summarized as follows:

• The pension obligation to former EY partners should be fully funded as part of the transaction.

• The entire tax service line should remain part of AssureCo (referring to the EY audit business).

• The proposed leadership of AssureCo should be announced immediately to ensure decisions currently being made do not prejudice this side of the firm.

• AssureCo may not have the resources to conduct high-quality audits where the required expertise is transferred to NewCo.

If you were to take a cynical view of the reasoning behind the memo, you might assume that it is the pension matter that the retired partners are most interested in the firm addressing. For one thing, they sign off reminding the firm that they represent some of the firm’s largest creditors. But they also raise the prospect of increasing their pensions by 10% to thank them for “substantial legacy efforts”, as occurred in the Cap Gemini divestment. You can’t blame them for asking.

The content we're consuming today

• WSJ: Larry Gagosian, World’s Most Powerful Art Dealer, Takes Steps Toward Succession Plan with New Board.

• FT: Revealed: FTX’s emergency fundraising term sheet($).

Off-balance sheet items

• The movie ‘She Said’, which follows two New York Times journalists’ efforts to expose Harvey Weinstein, is out now in theaters.

The bottom line