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Jesus, I'm occasionally amazed at GAAP for not requiring breakout of a business unit as large as $6 billion (last quarter obviously somewhat less) simply becaus
by allworknoplay 12y ago
Jesus, I'm occasionally amazed at GAAP for not requiring breakout of a business unit as large as $6 billion (last quarter obviously somewhat less) simply because the overall company is comparatively large; especially so when the profitability of the unit is so different from the overall company. Seems fucking material to me.
- adventured 12y agoI believe that's why Amazon went ahead with it. If you don't run into SEC requirements, you run into aggressive shareholders that will cause you legal problems trying to force you to reveal the value of such an enterprise. Suddenly Carl Icahn is breathing down your neck trying to get you to reveal that info, so they can judge if it should be spun off. The shareholder risk becomes immense the larger a business like that gets without breaking out any financial information on it.
- allworknoplay 12y agoI think you're correct, it probably just hit 5%. I'm just honestly amazed given the lack of transparency and risk in super gigantic corporations that there isn't an absolute dollar threshold for lines of business as well as a percentage one.
- tim333 12y agoIt would be hard to mandate as how would you define a business unit? If amazon just sold books would fiction and non fiction count as different units or do book sales and electrical? There a different ways you can slice a business.
- allworknoplay 12y agoIt's actually not difficult at all; there are already materiality rules (in the case of revenue disclosures, they're stated in percentages), and it's fraud to break them. You could just define material by both absolute dollars and also percentages.