Amazon.Com (Financial Analysis) Essay

2033 Words Sep 1st, 2006 9 Pages
ADMN919: Financial Accounting Project
Company: Amazon.com

Bikram Gautam
UNH (MANCHESTER)
Q1 - 9. Brief Description of the Company:

Founder and CEO Jeff Bezos opened the virtual doors of Amazon.com's online store in July 1995. The company was incorporated in 1994 in the state of Washington and reincorporated in 1996 in Delaware. The Company's principal corporate offices are located in Seattle, Washington. Amazon.com completed its initial public offering in May 1997, and its common stock is listed on the NASDAQ National Market under the ticker symbol AMZN. Amazon.com's fiscal year is based on the calendar year, and the last day of the fiscal year is December 31. The closing stock selling price for February 1, 2006 was $43.98.
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A total of $451 millions was reported for technology and content expenses which primarily consist of payroll and related expenses for employees involved in research and development, including application development, editorial content, merchandising selection, systems and telecommunications support, and costs associated with the systems and telecommunication infrastructure.

Q 19. What is the company’s policy on revenue recognition?

The company recognizes revenue from product sales or services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exits, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectivity is reasonably assured. Additionally, revenue arrangements with multiple deliverables are divided into separate units of accounting if the deliverables in the arrangement meet the following criteria: the delivered item has value to the customer on a standalone basis; there is objective and reliable evidence of the fair value of undelivered items; and delivery of any undelivered item is probable.

Q 20. What methods of inventory valuation does the company use?

The company uses the first-in-first-out (FIFO) method for inventory valuation, and the inventories are valued at the lower of cost or market value.

Q 21. What methods does the company use to depreciate fixed assets?

The company uses the

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