We use the Amazon Reserved Balances account for a few things.

Firstly, when a payout settlement from Amazon spans two months we split it into two invoices and then we roll the balance of the first invoice into the second to make reconciliation easier.

You can see these rolled forward items as they have the descriptions:

The ones with the description Split month settlement - balance of this invoice rolled forward are being rolled into the next invoice.

And these ones with the description Split month settlement - balance of previous invoice(s) rolled forward are the balance being rolled into this invoice.

So you should always have an amount being debited to the Amazon Reserved Balances account and then credited afterwards as the funds pass into and flow out of the account.

Secondly when Amazon actually reserves funds for future payout for whatever reason, these items have the description:

Funds reserved for future payout by Amazon have the description Amazon Reserved Balances - Current Reserve Amount.

Then when Amazon release those funds they have the description Amazon Reserved Balances - Previous Reserve Amount Balance.

So again, you should always have an amount being debited to the Amazon Reserved Balances account and then credited afterwards as the funds pass into and flow out of the account.

Lastly if you have a negative balance for a settlement Amazon charge your card on file and then two more line items are created:

Amazon Reserved Balances - Repayment of negative Amazon balance

and

Amazon Reserved Balances - Successful charge

These two lines should cancel each other out as one is debited to the Amazon Reserved Balances account and then credited afterwards as the funds pass into and flow out of the account.

Why do I have a balance showing on this account?

The balance showing on your balance sheet for "Amazon Reserved Balances" is made up of your actual reserved balances from Amazon, rolled forward balances by us and currency rate fluctuations.

As the payments pass in and out of the account as outlined above the exchange rates can differ so there is a variance there too.

Your accountant should be able to use this information to adjust the balance as needed.

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