AICPA issues ED on advertising costs.The American Institute of CPAs issued an exposure draft of a Statement of Position, Reporting on Advertising Costs. Under the ED's provisions, businesses and not-for-profit Not-for-profit An organization established for charitable, humanitarian, or educational purposes that is exempt from some taxes and in which no one in profits or losses. organizations would have to expense the cost of all advertising as incurred, except for certain direct response advertising that would be capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. and amortized over its expected life. In issuing the ED, Norman N. Strauss, chairman of the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). accounting standards executive committee, said, "Currently, no uniform guidance exists for reporting advertising costs. As a result, capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. and expense policies vary among companies, making it difficult to compare the results of operations." Comments are due by September 21, 1992. To obtain copies of the ED (product no. 800032), write the AICPA order department, CL 692, P.O. Box 1003, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York 10108-1003. The fax number is (800) 362-5066. The first five copies are free; additional copies cost $2.50 each. |
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