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Accounting for certain costs incurred in conjunction with start-up activities are not covered by this Subtopic. An entity should not conclude that costs outside the scope of this Subtopic are to be capitalized. Such costs shall be capitalized if they qualify for capitalization under other generally accepted accounting principles (GAAP).
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This Example illustrates application of the guidance in Section 720-15-15.
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A major U.S. beverage entity begins construction of a new plant in China. This represents the entity's initial entry into the Chinese market. As part of the overall strategy, the entity plans to introduce into China, on a locally produced basis, its major U.S. beverage brands. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
a
Travel costs, employee salary-related costs, and consulting costs related to feasibility studies, accounting, legal, tax, and governmental affairs
b
Training of local employees related to production, maintenance, computer systems, engineering, finance, and operations
c
Recruiting, organization, and training related to establishing a distribution network
d
Nonrecurring operating losses
e
Depreciation, if any, of new computer data terminals and other communication devices.
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The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:
a
Costs of long-lived asset additions, such as the new plant, production equipment, and packaging lines
b
Internal-use computer software systems development costs
c
Costs that are capitalizable as inventory
d
Deferred financing costs.
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This Example illustrates application of the guidance in Section 720-15-15.
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A retail chain is constructing and opening two new stores. One will open in a territory in which the entity already has three stores operating. The other will open in a territory new to the entity. (Costs related to both openings are treated the same for purposes of this Subtopic.) All of the stores provide the same products and services. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
a
Salary-related expenses for new employees
b
Salary-related expenses for the management store opening team
c
Training costs and meals for newly hired employees
d
Hotel charges, meals, and transportation for the opening team
e
Security, property taxes, insurance, and utilities costs incurred after construction is completed
f
Depreciation, if any, of new computer data terminals and other communication devices
g
Nonrecurring operating losses.
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The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:
","snippet":"The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic:\n(a) Store advertising costs\n(b) Coupon giveaways within the scope of Topic 606 on revenue from co…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:312cefbe4f3b86166915c0b74d5cfa10b791a85ff66d5f5dc8df5cc1c393ab60","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-8","para":"55-8","html":"
This Example illustrates application of the guidance in Section 720-15-15.
","snippet":"This Example illustrates application of the guidance in Section 720-15-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e9521e1cf93371bede704a0133adbdea5b73a5d096ff597f4a6287e4f83f6284","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-9","para":"55-9","html":"
A not-for-profit entity (NFP) that provides meals to the homeless is opening a shelter to house the homeless. The entity will rent the facility. This will be its first shelter and it will conduct a fundraising campaign to raise money to start up the shelter. The entity will lease space for the shelter and will incur capital expenditures for leasehold improvements and furniture. The entity expects that it will require three months to set up the space for the shelter. The entity will hire a security firm to secure the premises during the three-month period in which the shelter is built. The following costs that might be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic:
a
Employee salary-related costs related to needs and feasibility studies
b
Staff recruiting and training
c
Rent, security, insurance, and utilities
d
Consultant fees for developing policies and procedures for operating the shelter
e
Amortization and depreciation, if any, of leasehold improvements and furniture
f
Costs of social workers.
","snippet":"A not-for-profit entity (NFP) that provides meals to the homeless is opening a shelter to house the homeless. The entity will rent the facility. This will be its first shelter and it will conduct a fundraising campaign t…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ad2dbb9b2c2c9c1ca3d3f7cda971d959a1c1df3933f4cc435f8c052dc8f0c4c4","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},{"citation":"720-15-55-10","para":"55-10","html":"
The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic (see Subtopic 958-720):
a
Costs of fund-raising
b
Costs of leasehold improvements and furniture
c
Architect fees for the leasehold improvements
d
Advertising costs to publicize the shelter.
","snippet":"The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic (see Subtopic 958-720):\n(a) Costs of fund-raising\n(b) Costs of leasehold improvements and furnitur…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e1e195c894762cce983072b16722b004526301cc1e25bb5b61b6fd96de1e175","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:82d6fa3d80a7e81cc55a914798b145350631d71b2b8cf6b4ed83bfbaeb7df9a7","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be194512c019dc97525d17e51d88b4fe5d8757123b2b4ff18b373e8531c7e68d","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:be194512c019dc97525d17e51d88b4fe5d8757123b2b4ff18b373e8531c7e68d","downloaded_from":"2026-09-10T01:07:15.369Z","last_downloaded_at":"2026-09-10T01:07:15.369Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483394","source_sha256":"736001625fc7c4b47f01a4c3ad86d2ea12b91b80b4c8562673b041da79723a2b"}}