Amazon is an international firm that deals with various products within its enterprises. The firm is faced with a number of risks in regard to safeguarding the company's assets which includes competition from other similar service providers, strains caused by the rapid expansion, data loss, seasonality of the business which arms the company's revenue flow, inventory risks, system interruption and lack of redundancy, loss of key senior managerial personnel, foreign exchange risks, fluctuations related to operating results and growth rate, stock price volatility, unfavorable government regulations, addition in sales tax or other indirect tax liabilities, additional income tax liabilities, payments related risks among many other risks.
To minimise these risks, I think the firm has acquired an insurance policy that covers their assets because some of the risks involved in running successful ventures are inevitable. So, the company may have a comprehensive cover from the liability risks which may occur in the process of service delivery. There are no specific controls to the risks mentioned in the annual report.
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Amazon adopts the use of straight-line depreciation method for its property and equipment. The useful life for buildings is forty years, five years for fixtures and ten years for heavy equipment. These useful lives do not make sense since, if some of these assets are well maintained, they can last longer that the fixed useful lives set by the corporation.
Goodwill assets are the assets which need to be cleared out of the enterprise's stock due to certain reasons. It involves evaluating the tangible value of an asset and the fair value of a reporting unit to determine the fairness of the goodwill. Amazon does not write-off its assets; instead, they do stock clearance through goodwill.
Work cite
http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsAnnual
