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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Dwight E. Karlsen who wrote (31194)	12/25/1998 10:50:00 PM
From: getgo234	Read Replies (2) \| Respond to of 164684

Dwight: Thank you for your take on the accounting for the sale of gift certificates. If AMZN exceeded the Street's expectations for 4th qtr revenue without including sales of gift certificates they may very well want to record the sales in the 1st qtr when the certificates are redeemed so to minimize the sequential drop in sales in the first quarter which I suspect is inevitable. Thanks to you and Glenn for your insights on what I think is an important issue. ps It does sound like AMZN has some flexibility on when to record the sales- a rather enviable situation for a retailer especially one such as AMZN which as Glenn pointed out does not need to concern itself with federal taxes (having no income).

To: Dwight E. Karlsen who wrote (31194)	12/26/1998 9:06:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

When the certificate is purchased, debit Cash (asset), credit Unearned Revenue (liability). Dwight, We are stating virtually the same thing. It is a matter of symantics on what line items names are used. The fact remains the revenue should not be sales and there are no costs of goods sold until redemption of the certificate. In the same manner, it is totally illegal to recognize cost of goods sold without recognizing the revenue in the same quarter. Any company that did this would be getting a call from the IRS, with heavy penalties the likely result. We are back to symantics. It is illegal to recognize cost of goods sold without recgonizing sales rather than just revenue. With AMZN wanting to tally all certificates in the sales column for this quarter, I would guess that they will use an estimated Cost of Goods Sold number. I would guess that the IRS allows this. I would agree although this is not GAAP. Amazon does not believe in GAAP regardless <VBG>. Glenn