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Accounting Policies and Supplemental Disclosures (Policies) | 9 Months Ended
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Sep. 30, 2025
Accounting Policies [Abstract] |
Unaudited Interim Financial Information | Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2025 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2024 Annual Report on Form 10-K.
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and certain entities that support our healthcare services and production and distribution of video content. Intercompany balances and transactions between consolidated entities are eliminated.
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, valuation and impairment of investments, self-insurance liabilities, viewing patterns of capitalized video content, valuation of derivative instruments, and the determination of when to capitalize certain costs relating to new products or service offerings. Actual results could differ materially from these estimates. We review the useful lives of equipment on an ongoing basis. Effective January 1, 2025 we changed our estimate of the useful lives of a subset of our servers and networking equipment from six years to five years. The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.
Earnings Per Share | Earnings Per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The following table shows the calculation of diluted shares (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2025 |  | 2024 |  | 2025
Shares used in computation of basic earnings per share | 10,501 |  |  | 10,674 |  |  | 10,447 |  |  | 10,638 |
Total dilutive effect of outstanding stock awards | 234 |  |  | 171 |  |  | 258 |  |  | 177 |
Shares used in computation of diluted earnings per share | 10,735 |  |  | 10,845 |  |  | 10,705 |  |  | 10,815 |
Inventories | Inventories Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The inventory valuation allowance, representing a write-down of inventory, was $3.0 billion and $2.9 billion as of December 31, 2024 and September 30, 2025.
Accounts Receivable, Net and Other | Accounts Receivable, Net and Other Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and prepaid expenses and other current assets. As of December 31, 2024 and September 30, 2025, customer receivables, net, were $34.3 billion and $38.0 billion, vendor receivables, net, were $11.6 billion and $12.5 billion, and other receivables, net, were $3.4 billion and $3.8 billion. Prepaid expenses and other current assets, which include amounts related to non-income taxes and satellite network launch services deposits, were $6.3 billion and $6.8 billion as of December 31, 2024 and September 30, 2025. We currently expense satellite network launch services deposits upon launch to “Technology and infrastructure.” We estimate losses on receivables based on expected losses, including our historical experience of actual losses. The allowance for doubtful accounts was $2.0 billion and $2.3 billion as of December 31, 2024 and September 30, 2025.
Digital Video and Music Content | Digital Video and Music Content Included in “Other assets” on our consolidated balance sheets are the total capitalized costs of video, which is primarily released content, and music, which as of December 31, 2024 and September 30, 2025 were $19.6 billion and $21.5 billion. Total video and music expense was $5.0 billion and $5.5 billion in Q3 2024 and Q3 2025, and $14.2 billion and $15.7 billion for the nine months ended September 30, 2024 and 2025.
Unearned Revenue | Unearned Revenue Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2024 was $24.6 billion, of which $15.0 billion was recognized as revenue during the nine months ended September 30, 2025. Included in “Other long-term liabilities” on our consolidated balance sheets was $6.5 billion and $4.1 billion of unearned revenue as of December 31, 2024 and September 30, 2025. Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $200 billion as of September 30, 2025. The weighted-average remaining life of our long-term contracts is 3.8 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. We expect to adopt the ASU on a retroactive basis. In November 2024, the FASB issued an ASU amending existing income statement disclosure guidance, primarily requiring more detailed disclosure for expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our disclosures.

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