Question

Review the new 2019 Convergence of Accounting Standards and examine the financial statements of Amazon. Identify two or three standards that may have the greatest influence on your company's future financial reporting and explain why they are important.

Answer 1

Amazon is one of the most influential companies of our time I believe Amazon despite its already high stock price, will continue to increase in value.Analysis of Amazon's current business operations shed light on to the happenings of the firm. Special attention was given to the firms positioning within the business environment. Factors such as consumer power supplier power threats of substitutes products, threats of new entrants, and competition between existing firms were all examined to generate a better picture of Amazon current positioning. Most threats and forces were exceedingly low, meaning that Amazon prospers from having a few successful competitors or purchases and suppliers. Amazon Accounting standards similarly revealed that the company has few, if any, relevant management incentives to commit fraud. While certain compensation policies are worth nothing, these don't differ from standards across the industry. Amazon policy for recording revenues deserves to be mentioned. Revenue pertaining to usages of online material and other subscription based services proves challenging, but Amazon continuously proves to operate within the acceptable accounting standards as outline by FASB INVENTORY : Within the notes to the financial statements, Amazon states that they utilize the first in, first out method of accounting for inventory. Inventory items a are recorded at lower of coat or net realizable value. In my view based on the Amazon financial performance we can follow certain policies and standards to our company is as follows: 1. Revenue recognition : we should follow principles according to GAAP.we should adhere to four definite metrics such as evidence of arrangement exists, services rendered , sale price is fixes or easily determinable, collection is measured as reasonably assured 2. Inventory : Inventory items are recorded at lower of cost or net realizable value. 3. Leases : The larger the expense the less net income. All things considered Amazon's accounting policies and disclosure quality are top notch.