U.S. GAAP Codification of Accounting Standards

U.S. GAAP Codification Accounting Standards, ASC

Principles of Accounting Intermediate Financial AccountingU.S. GAAP Textbook
Accounting by Topic Accounting Terms Dictionary

U.S. GAAP Accounting Standards
Codification Topic 340-20: Capitalized Advertising Costs

Codification Topic 340-20
Capitalized Advertising Costs

Advertising Costs

AICPA Statement of Position (SOP) 93-7
"Reporting on Advertising Costs"

General Principle
Advertising costs are expensed 
--> except for (A)
(A) Direct-response advertising

When are advertising costs expensed?
Entities have a choice of (1) and (2)
(1) Expensed when incurred
(2) Expensed when the advertising takes place first time

Advertising expenditures after revenue recognition
--> When the entity reimburses the costs of "cooperative advertising" after advertising takes place
--> Advertising costs are expensed when related revenue is recognized

Direct-response advertising costs are capitalized if both conditions are met
1. Primary purpose of advertising is
--> to promote sales to certain customers
--> whose responses to the advertising can be documented
2. Probable future benefits from direct-response advertising

Capitalized advertising costs are amortized
--> on a "cost-pool-by-cost-pool" basis
--> over the period of future benefits

Realizability test for subsequent measurement
If future benefit is less than carrying amount
--> expense the excess as advertising costs during the period

   Codification Topic 340
   Other Assets and Deferred Costs
Subtopics of Codification Topic 340
   340-10 Overall
   340-20 Capitalized advertizing costs
   340-30 Insurance contracts that do not transfer insurance risk   
Accounting Terms of Codification Topic 340-10
Accounting Terms of Codification Topic 340-20
Accounting Terms of Codification Topic 340-30
   Assuming entity
   Ceding entity
   Experience adjustment
   Insurance risk
   Timing risk
   Underwriting risk

   Other Topics at the Codification 300 
Accounting Standards Codification, ASC, Overview
ASC Codification Topic 305: Cash and Cash Equivalents
ASC Codification Topic 310: Receivables
ASC Codification Topic 320: Investments-Debt and Equity Securities
ASC Codification Topic 323: Investments-Equity Method and Joint Ventures
ASC Codification Topic 325: Investments-Other
ASC Codification Topic 330: Inventory
ASC Codification Topic 340: Other Assets and Deferred Costs
ASC Codification Topic 350: Intangibles-Goodwill and Other
ASC Codification Topic 360: Property, Plant, and Equipment

   U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

U.S. GAAP by Topic
Accounting Topics

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