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Accounting Policies and Supplemental Disclosures
 6 Months Ended
Jun. 30, 2021
Accounting Policies [Abstract]  
Accounting Policies and Supplemental Disclosures ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES
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 2021 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 2020 Annual Report on Form 10-K.
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 seller lending financing activities. Intercompany balances and transactions between consolidated entities are eliminated.
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, and valuation and impairment of investments. Actual results could differ materially from these estimates.
Supplemental Cash Flow Information
The following table shows supplemental cash flow information (in millions):
Three Months Ended
June 30,		Six Months Ended
June 30,		Twelve Months Ended
June 30,
202020212020202120202021
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt$139 $179 $430 $455 $872 $942 
Cash paid for operating leases1,086 1,577 2,115 3,217 3,929 5,577 
Cash paid for interest on finance leases161 129 329 286 662 569 
Cash paid for interest on financing obligations21 35 43 68 77 127 
Cash paid for income taxes, net of refunds486 1,803 791 2,604 1,221 3,526 
Assets acquired under operating leases3,347 5,578 5,755 9,114 10,530 19,576 
Property and equipment acquired under finance leases3,155 1,642 5,321 3,709 13,110 9,976 
Property and equipment acquired under build-to-suit arrangements482 1,094 861 1,981 1,504 3,387 

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
June 30,		Six Months Ended
June 30,
2020202120202021
Shares used in computation of basic earnings per share500 505 499 505 
Total dilutive effect of outstanding stock awards9 9 9 9 
Shares used in computation of diluted earnings per share509 514 508 514 
Other Income (Expense), Net
Other income (expense), net, is as follows (in millions):
Three Months Ended
June 30,		Six Months Ended
June 30,
2020202120202021
Marketable equity securities valuation gains (losses)$235 $157 $204 $81 
Equity warrant valuation gains (losses)418 939 266 1,244 
Upward adjustments relating to equity investments in private companies— 31 — 1,506 
Foreign currency gains (losses)13 110 (209)79 
Other, net(20)24 (21)48 
Total other income (expense), net646 1,261 240 2,958 
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 $2.3 billion and $2.4 billion as of December 31, 2020 and June 30, 2021.
Accounts Receivable, Net and Other
Included in “Accounts receivable, net and other” on our consolidated balance sheets are amounts primarily related to customers, vendors, and sellers. As of December 31, 2020 and June 30, 2021, customer receivables, net, were $14.8 billion and $16.3 billion, vendor receivables, net, were $4.8 billion and $4.2 billion, and seller receivables, net, were $381 million and $646 million. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory.
We estimate losses on receivables based on expected losses, including our historical experience of actual losses. The allowance for doubtful accounts was $1.1 billion as of December 31, 2020 and June 30, 2021.
Digital Video and Music Content
The total capitalized costs of video, which is primarily released content, and music as of December 31, 2020 and June 30, 2021 were $6.8 billion and $8.6 billion. Total video and music expense was $2.8 billion and $3.1 billion in Q2 2020 and Q2 2021, and $5.2 billion and $6.2 billion for the six months ended June 30, 2020 and 2021.
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, 2020 was $11.6 billion, of which $6.7 billion was recognized as revenue during the six months ended June 30, 2021. Included in “Other long-term liabilities” on our consolidated balance sheets was $1.9 billion of unearned revenue as of December 31, 2020 and June 30, 2021.
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 $60.7 billion as of June 30, 2021. The weighted-average remaining life of our long-term contracts is 3.6 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.