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TANGIBLE AND INTANGIBLE RESOURCES
OTHER SOURCES OF CAPITAL
INTERNATIONAL TRANSACTIONS AND COMPETITIVE ADVANTAGE
PERFORMANCE OF TANGIBLES AND INTANGIBLES
INTERNAL RATE OF RETURN
EFFECTIVENESS OF COMMUNICATION
Online giants, America Online, offer a prime partnership example. Within this alliance AOL hopes to gain more hits, visitors, and ultimately paying subscribers to its sites, whereas Amazon seeks to tap into AOL’s subscriber base, one it believes to be a strong demographic match to its own, in an effort to sell more books, toys, and CDs.
America Online (AOL), a leader in the then-young field of interactive media, quickly adopted the new accounting method. The company did not recognize these costs as incurred. Instead, AOL capitalized the expenditures, and then amortized them over periods of 12 to 18 months. By the end of its fiscal year ending June 30, 1994, AOL’s balance sheet showed $37 million of subscriber capitalized acquisition costs. AOL reported a $6.2 million net profit in fiscal 1994 instead of a loss of around $6 million.
Equity is the amount of money invests by the shareholder while purchasing shares of the Company. Variations on this concept are the lease, in which the creditor may own the underlying asset and preferred stock, in which there is no obligation to pay back the funds on a specific date, but there is an interest payment obligation. Preferred stock is also a variation on equity, because it is not collateralized and there is no obligation to pay it back on a specific date. Another... [continues]
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