Reporting on advertising costs

The AICPA's Accounting Standards Executive Committee (AcSEC) recently issued statement of position, SOP 93-7, Reporting on Advertising Costs. The SOP is intended to be the first step in a multi-step AcSEC project on reporting the costs of activities undertaken to create probable future economic...

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Bibliographic Details
Published in:The CPA journal (1975) 1994-05, Vol.64 (5), p.36
Main Authors: Tanenbaum, Joel, Finger, Andrew D
Format: Article
Language:English
Subjects:
Accounting
Accounting and auditing
Accounting policies
Advertising
Advertising campaigns
Advertising expenditures
AICPA statements of position
Balance sheets
Costs
Customers
FASB statements
Financial reporting
Financial statements
Print advertising
Production costs
Reporting requirements
SOP 93-7
Television advertising
Trade and professional associations
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Summary:The AICPA's Accounting Standards Executive Committee (AcSEC) recently issued statement of position, SOP 93-7, Reporting on Advertising Costs. The SOP is intended to be the first step in a multi-step AcSEC project on reporting the costs of activities undertaken to create probable future economic benefits through the development of intangible assets, such as advertising. The future benefits are probable future revenues the entity would not have without the advertising in excess of the costs to be incurred in realizing those revenues. Under the SOP, most advertising will be expensed at least as early and usually earlier than it would have been without the SOP. Some conclusions in the SOP, such as what is required for capitalization of advertising, are based on conceptual principles. Other conclusions, such as limiting advertising eligible for capitalization to direct-response advertising, are based on arbitrary practical cuts.
ISSN:0732-8435