Financial Statement Disclosures
Financial Statement Disclosures
Financial Statement Disclosures
Student’s Name
Institutional Affiliation
FINANCIAL STATEMENT DISCLOSURES 2
companies’ annual reports to help in explaining how the figures revealed at financial statements
are arrived at. To facilitate analysis of financial statement disclosures, Amazon.com Inc. was
selected. The notes included to its published financial statements for the year ending 31
December 2018 include the business description and accounting principles adopted during
preparation of reports; analysis of restricted cash, marketable securities, cash and cash
equivalents; property and equipment; goodwill, acquisitions and intangible assets acquisitions;
debt and other long-term liabilities analysis; contingencies and commitments; analysis of equity
stockholders; Income taxes; segment information and quarterly results (Amazon Annual Report,
2019).
accounts of Amazon.com and the companies which primarily benefit from the entity.
Accounting Principles which requires various assumptions and estimates which in turn affects
the amounts of revenues, expenses, liabilities and assets reported. Various estimates were made
in respect to goodwill and acquired intangible assets valuations, income taxes, and valuation of
Amazon.com financial reports footnotes also include their revenue generating activities
which include retailing, third party selling, sales of advertising services and subscription
services. Included in the reports of the Amazon.com was restriction or rather pledges of their
marketable securities, cash and cash equivalents as security for leased property. The presentation
of gross property and equipment amortization and accumulated depreciation was revised to take
FINANCIAL STATEMENT DISCLOSURES 3
account of in-service property and equipment as well as fully depreciated equipment. The useful
life 2016, 2017 and 2018 acquired intangible assets ranged from 1 to 7 years. Included in the
goodwill is the Whole Foods Market, Ring and PillPack acquisitions in the Souq and Northern
America. It additionally takes into consideration of foreign exchange rate changes. Accumulated
amortization and the original cost of the intangible assets is excluded in consolidated financial
statements and the economic life estimated for the intangibles is 5 years (Amazon Annual
Report, 2019).
2.5% of the debts were issued November, 2012 with 2.66% as the effective interest rate.
Effective interest rate of 2.73%, 3.43%, 3.9%, 4.93% and 5.12% for the years 2019, 2021, 2024,
2034 and 2045 respectively. Included in the debts is 2025 notes issued in 2017 worth $872
million related to Whole Foods Market acquisition in 2017. As at 31 December 2017 Accrued
expenses include current lease obligation of $7.7 billion and $5.5 billion. Meanwhile, $9.6
billion capital lease obligation as at 31 December 2018 was recorded under long-term liabilities.
include various claims which include law suit filed by Australian copyright collection society in
2013 among others. In the year 2018, the related tax benefit reduced statutory corporate tax in
might have been encountered in the year financial statements are published. These notes serve
company details which are not revealed in the body of the statements (Meiryani, 2019). Financial
disclosed in the reports. It is meant to influence the decision of investors by ensuring they fully
FINANCIAL STATEMENT DISCLOSURES 4
company thus giving the investors more confidence on available financial reports.
References
https://ir.aboutamazon.com/static-files/0f9e36b1-7e1e-4b52-be17-145dc9d8b5ec
Beuselinck, C., Deloof, M., & Manigart, S. (2013). Financial Reporting, Disclosure, and
10.1093/oxfordhb/9780199642007.013.0013
Meiryani, A., (2019). Full Disclosure In Financial Reporting. [online] Ijstr.org. Available at:
<https://www.ijstr.org/final-print/june2019/Full-Disclosure-In-Financial-Reporting.pdf>