Note that Amazon's overall Revenues are up 44%
Less sensational, more nuts and bolts article http://www.marketwatch.com/story/amazoncom-announces-third-q...
Source is Business Wire
https://en.wikipedia.org/wiki/Business_Wire
"Business Wire is a company that disseminates full-text news releases from thousands of companies and organizations worldwide to news media, financial markets, disclosure systems, investors, information web sites, databases and other audiences"
Does the press have an incentive to talk about the plunge in profits? Yes
Does the company itself have an incentive to spin things by touting increased revenues? Yes
That said, the buck should eventually stop at Free Cash Flow to prove shareholder value, which is then paid as dividend or invested sensibly.
Compare: http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=iro...
IAS 2[1] states "inventories shall be measured at the lower of cost and net realizable value", which is exactly what you said.
IAS is the International Accounting Standards, which is what pretty much all accounts meet. Inventories mean stock. Net realizable value means what you can get for them. US GAAP covers this as well (though I can't find a reference right now).
Showing your inventory at $20 per unit, when you can only expect to make $15 per unit selling them, would be overestimating the value of your stock. A competent auditor wouldn't sign off on your accounts like that.
[1] (http://www.icaew.com/en/library/subject-gateways/accounting-...)
(from a trainee accountant)
The cost of constructing the new Kindles is still booked, just under a different part of the book. Once the devices are sold, the amount changes from an asset to a liability.
FYI, once it's sold, it's neither an asset or a liability - it's no longer reflected on the company's balance sheet. The revenue and COGS show up on the income statement, and may also be reflected on the cash flow statement. But they're off the balance sheet.