SEC Comment Letter for WPP plc (WPP, WPPGF) (CIK 0000806968) (WPP) — Oct 31, 2017
WPP plc (WPP, WPPGF) (CIK 0000806968)
Date: Oct. 31, 2017 · CIK: 0000806968 · Accession: 0000000000-17-038536
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-16350
Letter
Mail Stop 3720 October 31, 2017 Paul W.G. Richardson Group Chief Financial Officer WPP plc 27 Farm Street London, United Kingdom, W1J 5RJ
Re: WPP plc Form 20-F for Fiscal Year Ended December 31, 201 6 Filed April 28, 2017 File No. 000-16350
Dear Mr. Richardson :
We have reviewed your October 11, 2017 response to our comment letter and have the following comment. Please comply with the following comment in future filings. Confirm in writing that you will do so and explain to us how you intend to comply.
Please respond to th is comment within ten bus iness days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comment apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to th is comment, we may have additional comments.
Paul W.G. Richardson WPP plc October 31 , 2017 Page 2
Consolidated Income Statement, page F -8
1. We note your responses to comments one through three. It appears that you have elected to present an analysis of expenses using a classification based on their func tion. We note that the amount reported as ‘Operating Expenses’ includes costs incurred that are required to generate revenue. For example, based upon your response to prior comment two, ‘Direct Costs’ only includes fees paid to external suppliers and exc ludes internal staff and related establishment costs. Therefore, it appears that your ‘Net Sales’ subtotal presents a measure of gross profit that is incomplete because it excludes costs that you are required to incur to be able to generate revenue, irres pective of whether or not you consider those costs direct costs or indirect costs of revenue.
As a result, it appears that your current presentation does not provide your financial statement users any insight into the total cost you incurred to generate y our revenue or the amount incurred for other functional activities, such as marketing and administrative. Accordingly, it appears that you need to revise your financial statement presentation to report line items comprised of functional expenses of a simi lar nature and subtotals of gross profit that are complete using captions that make the components of the subtotal clear and understandable. Please refer to paragraphs 15, 29, 85, 85A, 99 and 103 of IAS 1.
You may contact Inessa Kessman, Senior Staff Accountant at 202-551-3371 or me at (202) 551 -3810 with any questions.
Sincerely,
/s/ Carlos Pacho
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Mail Stop 3720 October 31, 2017 Paul W.G. Richardson Group Chief Financial Officer WPP plc 27 Farm Street London, United Kingdom, W1J 5RJ Re: WPP plc Form 20-F for Fiscal Year Ended December 31, 201 6 Filed April 28, 2017 File No. 000-16350 Dear Mr. Richardson : We have reviewed your October 11, 2017 response to our comment letter and have the following comment. Please comply with the following comment in future filings. Confirm in writing that you will do so and explain to us how you intend to comply. Please respond to th is comment within ten bus iness days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comment apply to your facts and circumstances, please tell us why in your response. After reviewing your response to th is comment, we may have additional comments. Paul W.G. Richardson WPP plc October 31 , 2017 Page 2 Consolidated Income Statement, page F -8 1. We note your responses to comments one through three. It appears that you have elected to present an analysis of expenses using a classification based on their func tion. We note that the amount reported as ‘Operating Expenses’ includes costs incurred that are required to generate revenue. For example, based upon your response to prior comment two, ‘Direct Costs’ only includes fees paid to external suppliers and exc ludes internal staff and related establishment costs. Therefore, it appears that your ‘Net Sales’ subtotal presents a measure of gross profit that is incomplete because it excludes costs that you are required to incur to be able to generate revenue, irres pective of whether or not you consider those costs direct costs or indirect costs of revenue. As a result, it appears that your current presentation does not provide your financial statement users any insight into the total cost you incurred to generate y our revenue or the amount incurred for other functional activities, such as marketing and administrative. Accordingly, it appears that you need to revise your financial statement presentation to report line items comprised of functional expenses of a simi lar nature and subtotals of gross profit that are complete using captions that make the components of the subtotal clear and understandable. Please refer to paragraphs 15, 29, 85, 85A, 99 and 103 of IAS 1. You may contact Inessa Kessman, Senior Staff Accountant at 202-551-3371 or me at (202) 551 -3810 with any questions. Sincerely, /s/ Carlos Pacho Carlos Pacho Senior Assistant Chief Accountant AD Office 11 – Telecommunications