I have chosen Amazon for my company. My company's stock ticker is
AMZN. Amazon is currently in the e-commerce retail industry.
Amazon started in 1994 in Bellevue, Washington. Amazon
participates in e-commerce retail which catalogues millions of
products from thousands of different suppliers around the world for
purchase by consumers. Amazon has pioneered one-day delivery of
many of their products through their Prime service, which is a
monthly subscription. Amazon has many regional warehouses around
the world and currently services 58 countries. By pioneering ultra-
fast shipping and delivery, Amazon has grown to be the biggest e-
commerce giant in the United States.
The inventory line item from Amazon's balance sheet is accounted for
at first-in, first-out. The valuation method is lower of cost or market
and net realizable value. I believe that lower of cost or market is the
best way to ensure that investors are receiving the most accurate
information and also takes into account the principle of conservatism.
Using first-in, first-out is the most accurate way to account for
inventory cost when it comes to time-relevant distribution methods
from their consumer ordering/fulfilment process. There are many
perishable items on Amazon's product lists such as food, paint,
chemicals, etc. Many of these have expiration dates or shelf lives and
the oldest must be fulfilled to a consumer as soon as they are ordered
to ensure that Amazon's inventory isn't written down because of the
expiration.
