Amazon Secure About SEC Accounting Probes

Mega online retailer Amazon.com has gotten a taste of what the accounting industry is going through with regard to an SEC probe.

The SEC has been in discussions with Amazon for the past month and has now launched an information inquiry into accounting practices revolving around Amazons partnerships with certain vendors. Executives with Amazon have issued a statement saying they remain confident their accounting practices--and the way they report revenue--remain above board and thorough.

The investigation has been colored with Amazon's relationship with the home furnishing store, Living.com, which filed for bankruptcy earlier this year. Amazon had accepted an equity stake in Living.com in lieu of cash. Amazon reported recently that it has signed a number of new contracts with other retailers, most of which were negotiated with cash rather than part ownership in their companies.

Accounting experts are wrestling with the proper method for accounting for transactions that involve trading services for an equity relationship.


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