According to Amazon's annual report for 2018, the company recorded total accruals and deferrals of $23,663 million, which is a significant increase from the previous year's $18,170 million. This increase is primarily attributed to the company's growth and expansion.
Most of Amazon's accruals and deferrals pertain to operating expenses such as salaries, rent, utilities, marketing, and advertising. Additionally, the company has significant accruals and deferrals related to inventory, accounts payable, and taxes.
Accruals and deferrals are crucial accounting entries used to recognize expenses or revenues that have not yet been realized in cash. They help ensure that a company's financial statements accurately reflect its financial position and results of operations. By recording expenses and revenues when they are incurred or earned, accruals and deferrals help to smooth out a company's financial results, making them more comparable to other companies.
In Amazon's case, the increase in accruals and deferrals is a sign of the company's growth and expansion. As a business grows, it incurs more expenses and revenues that are not yet realized in cash. This is a normal part of business growth, and it is important for investors to understand how accruals and deferrals impact a company's financial statements.