Seattle (June 12, 2002) -- The Securities and Exchange Commission ended its informal inquiry into Amazon.com's accounting treatment and disclosures for some of its strategic alliances without recommending any enforcement proceeding, the Seattle-based online retailer said.Amazon said the informal inquiry related to the revenue recognition, equity investments, and other accounting and disclosure matters pertaining to its commercial and stock purchase agreements with its partners in the Amazon Commerce Network.
Separately, Amazon.com said it reached a settlement with the SEC in an accounting investigation involving Internet retailer Ashford.com, which is owned by Global Sports Inc. The SEC found that in March 2000, Ashford.com improperly deferred $1.5 million in expenses under a contract with Amazon, allowing Ashford to understate its marketing expenses and improve its pro forma results to edge out analysts' estimates by a penny. According to the SEC, Ashford reported a pro forma net loss for the quarter of 30 cents per share, instead of the 32 cents per share loss it should have reported.
The commission found that Amazon was a cause of Ashford's violation of SEC rules. As part of the settlement, Amazon.com agreed to cease-and-desist from committing or causing violations of the provisions of the federal securities laws without admitting or denying any wrongdoing. The SEC fined two Ashford executives civil penalties totaling $85,000.
-- Electronic Accountant Newswire staff
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