[lugg]

It does actually. Cost of doing business includes all costs.

If amazon believes they need to spend money on R&D then that R&D is a cost of doing business, if its not turning a profit with that R&D spending then the business is not sustainable by definition.

Amazon was not doing R&D for shits and giggles. Just because the time horizon was long doesn't mean it wasn't any less of a requirement for their success. Amazon would not be in the same place it is today if not for that expenditure so claiming it wasn't a "cost" is just disingenuous.

[formercoder]

Should we have been allowing amazon to capitalize that R&D though? It creates one of their largest assets and yet is not reflected on the balance sheet and is expensed immediately.

[icebraining]

> if its not turning a profit with that R&D spending then the business is not sustainable by definition.

Why? If the revenue perfectly matches the expenses (including R&D), it won't turn a profit, but it can be sustained indefinitely.

[TomMarius]

It doesn't actually. When we're talking about taxes, we have specific timeframes in mind, that is one year. You don't have to turn a profit at year 1 or even year 100 in order to be profitable.