The guidance in this Subtopic applies to all entities, including not-for-profit entities (NFPs).
The guidance in this Subtopic applies to all advertising transactions and activities, with specific exceptions noted below.
The guidance in this Subtopic does not apply to the following transactions and activities:
- a
Direct-response advertising costs of an insurance entity (for guidance, see Subtopic
944-30 on insurance).
- b
Advertising costs in interim periods (for guidance, see paragraph 270-10-45-7). - c
Costs of advertising conducted for others under contractual arrangements.
- d
Indirect costs that are specifically reimbursable under the terms of a contract.
- e
Fundraising by NFPs (however, this Subtopic does apply to advertising activities of NFPs).
- f
Customer acquisition activities, other than advertising.
- g
The costs of premiums, contest prizes, gifts, and similar promotions, as well as discounts or rebates, including those resulting from the redemption of coupons. (Other costs of coupons and similar items, such as costs of newspaper advertising space, are considered advertising costs.)
The guidance in this Subtopic may or may not apply to the following transactions and activities:
- a
Some activities, such as product endorsements and sponsorships of events, which may be performed pursuant to executory contracts. Costs incurred under executory contracts generally are recognized as performance under the contract is received. Executory contracts should be evaluated to determine whether the costs recognized under such contracts are advertising costs. To the extent that those costs are advertising costs, such costs should be accounted for in conformity with the guidance in this Subtopic.