The company I chose for the milestone is Amazon, and their stock ticker is AMZN. Amazon
is a retail shopping service that sells various products and services to consumers, and sellers. Jeff
Bezos, the founder of Amazon, intended to just sell books online but shortly after expanded to
selling clothes, electronics, video games, anything else you may need.
Each year on Amazon’s balance sheet, prepayments of the Amazon Web Service and
Amazon prime memberships are classified as unearned revenue. This is because the revenue has
not been fully earned yet, but the company is still liable to produce the service. As the revenue
comes through, the unearned revenue will reduce. For example, some Amazon prime members
pay $99 for a year of the service prior to the services being provided. Amazon has performance
obligations that tie mainly to the web service and the connection to the customers contracts for
future services. Amazon having unearned revenue on the books could be concerning for investors
as it can cause inaccuracies within the balance sheets.
