# ASC 720-15-55: Other Expenses — Start-Up Costs — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/15/#55-implementation-guidance-and-illustrations) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:be194512c019dc97525d17e51d88b4fe5d8757123b2b4ff18b373e8531c7e68d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-15-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/720/15/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [720-15-55-1](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:398e22b071a1f623d824c27f42d5a85b77da1867c0fc841a3740abb1aa2b1856 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting for certain costs incurred in conjunction with [start-up activities](https://asc.understandingaccounting.org/glossary/s/#start-up-activities "Defined broadly as those one-time activities related to any of the following: Opening a new facility Introducing a new product or service Conducting business in a new territory Conducting business with an entirely new class of customers (for example, a manufacturer who does all of its business with retailers attempts to sell merchandise directly to the public) or beneficiary Initiating a new process in an existing facility Commencing some new operation.") 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). #### Illustrations ##### [720-15-55-2](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:8ae7c846cb517f1e842abb5921c0ecd4fac0ad80b2b6c933caafbca13e4fdd23 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the guidance in Section 720-15-15. ##### [720-15-55-3](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:c5857cc900ee665a681bf78309af0edf95c33dabe13a38df857f9604a49b457a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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: 1. a Travel costs, employee salary-related costs, and consulting costs related to feasibility studies, accounting, legal, tax, and governmental affairs 2. b Training of local employees related to production, maintenance, computer systems, engineering, finance, and operations 3. c Recruiting, organization, and training related to establishing a distribution network 4. d Nonrecurring operating losses 5. e Depreciation, if any, of new computer data terminals and other communication devices. ##### [720-15-55-4](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:91d4c3cfb8064484eae225a423c150a078a6a345a5a07449558d3a79cb06efc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic: 1. a Costs of long-lived asset additions, such as the new plant, production equipment, and packaging lines 2. b Internal-use computer software systems development costs 3. c Costs that are capitalizable as inventory 4. d Deferred financing costs. ##### [720-15-55-5](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:1ad264068c75516b043bbde9f1c80dbb445232c4bb6f12cfd17801180e36e70a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the guidance in Section 720-15-15. ##### [720-15-55-6](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:f924f7976a4137bf95e61217ec099839ed77490761262d410c578c400b221180 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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: 1. a Salary-related expenses for new employees 2. b Salary-related expenses for the management store opening team 3. c Training costs and meals for newly hired employees 4. d Hotel charges, meals, and transportation for the opening team 5. e Security, property taxes, insurance, and utilities costs incurred after construction is completed 6. f Depreciation, if any, of new computer data terminals and other communication devices 7. g Nonrecurring operating losses. ##### [720-15-55-7](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:312cefbe4f3b86166915c0b74d5cfa10b791a85ff66d5f5dc8df5cc1c393ab60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic: 1. a Store advertising costs 2. b Coupon giveaways within the scope of Topic 606 on [revenue](https://asc.understandingaccounting.org/glossary/r/#revenue "Inflows or other enhancements of assets of an entity or settlements of its liabilities (or a combination of both) from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.") from [contracts](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") with [customers](https://asc.understandingaccounting.org/glossary/c/#customer "A party that has contracted with an entity to obtain goods or services that are an output of the entity's ordinary activities in exchange for consideration.") (see paragraphs [606-10-32-25 through 32-27](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-25) for guidance on consideration payable to a customer) 3. c Costs of uniforms 4. d Costs of furniture and cash registers 5. e Costs to obtain licenses, if any 6. f Security, property taxes, insurance, and utilities costs related to construction activities 7. g Deferred financing costs (see Subtopic 835-30). ##### [720-15-55-8](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:e9521e1cf93371bede704a0133adbdea5b73a5d096ff597f4a6287e4f83f6284 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates application of the guidance in Section 720-15-15. ##### [720-15-55-9](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:ad2dbb9b2c2c9c1ca3d3f7cda971d959a1c1df3933f4cc435f8c052dc8f0c4c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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: 1. a Employee salary-related costs related to needs and feasibility studies 2. b Staff recruiting and training 3. c Rent, security, insurance, and utilities 4. d Consultant fees for developing policies and procedures for operating the shelter 5. e Amortization and depreciation, if any, of leasehold improvements and furniture 6. f Costs of social workers. ##### [720-15-55-10](https://asc.understandingaccounting.org/asc/720/15/#720-15-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:07:15.369Z to 2026-09-10T01:07:15.369Z Record version: sha256:1e1e195c894762cce983072b16722b004526301cc1e25bb5b61b6fd96de1e175 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following costs that might be incurred in conjunction with start-up activities are outside the scope of this Subtopic (see Subtopic 958-720): 1. a Costs of fund-raising 2. b Costs of leasehold improvements and furniture 3. c Architect fees for the leasehold improvements 4. d Advertising costs to publicize the shelter.