Amazon.com Inc (NASDAQ:AMZN) has discussed accounting changes for its gift card and the Kindle branded electronic devices.
The e-tail giant disclosed that new accounting rule will mean that products distributed to third-party sellers will have to be booked at the point of distribution rather than at the underlying sale to customers, meanwhile, the timing of revenue realisation for gift cards is also changing.
Amazon is far from alone in its need to adapt. The rule changes, referred to as ASC 606, were put forward by the Financial Accounting Standards Board (FASB) and are due to come into effect in 2018.
It intends to make a cumulative adjustment rather than resort to a full restatement of past accounts.
The changes are expected to impact a wide variety of retailers and restaurant changes. Amazon is due to adopt the new approach from the first quarter of next year.