{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/720/35/#25-recognition","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"720","topic_title":"Other Expenses","subtopic":"720-35","subtopic_title":"Advertising Costs","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"720-35-25-1","para":"25-1","html":"
The costs of advertising within the scope of this Subtopic shall be expensed either as incurred or the first time the advertising takes place, except for those costs described in paragraph 720-35-25-1A. The accounting policy selected from these two alternatives shall be applied consistently to similar kinds of advertising activities. Deferring the costs of advertising until the advertising takes place assumes that the costs have been incurred for advertising that will occur. Such costs shall be expensed immediately if such advertising is not expected to occur. Examples of the first time advertising takes place include the first public showing of a television commercial for its intended purpose and the first appearance of a magazine advertisement for its intended purpose.
","snippet":"The costs of advertising within the scope of this Subtopic shall be expensed either as incurred or the first time the advertising takes place, except for those costs described in paragraph 720-35-25-1A. The accounting po…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b8ba6ae370a8211846cae4981268378b455321f92421cdab58aae9f128d271fc","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"citation":"720-35-25-1A","para":"25-1A","html":"
Expenditures for some advertising costs are made after recognizing revenues related to those costs. For example, some entities assume an obligation to reimburse their customers for some or all of the customers' advertising costs (cooperative advertising). When revenues related to the transactions creating those obligations are recognized before the expenditures are made, those obligations shall be accrued and the advertising costs expensed when the related revenues are recognized.
","snippet":"Expenditures for some advertising costs are made after recognizing revenues related to those costs. For example, some entities assume an obligation to reimburse their customers for some or all of the customers' advertisi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4f008df7f6ffad0341aed5079f2c4d5eb47f5e37a196208d0f8a5db1a1caeeab","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5772f10db0108017b641db416f635cdaac7987d9303877c9dadaf75e0c3851ba","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Tangible Assets","paragraphs":[{"citation":"720-35-25-2","para":"25-2","html":"
For purposes of applying this Subtopic, costs incurred to produce film or audio and video tape to be used to communicate advertising do not create tangible assets.
","snippet":"For purposes of applying this Subtopic, costs incurred to produce film or audio and video tape to be used to communicate advertising do not create tangible assets.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:87d14afda7fdbe231bd8b451f083ef3ca4b43cd1e3eee8de709125d595b5fb1b","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"citation":"720-35-25-3","para":"25-3","html":"
Sales materials, such as brochures and catalogues, may be accounted for as prepaid supplies until they no longer are owned or expected to be used, in which case their cost would be a cost of advertising and shall be accounted for in conformity with the guidance in this Subtopic.
","snippet":"Sales materials, such as brochures and catalogues, may be accounted for as prepaid supplies until they no longer are owned or expected to be used, in which case their cost would be a cost of advertising and shall be acco…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:680973d5fdecb8921450e38f9b2c36694d1e3e112086c05fb94986d4f01f84a2","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:965650dd918cb919700a321bad6178761dd41c917ea2e618c1c94553d3f7b4a9","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Producing Advertising","paragraphs":[{"citation":"720-35-25-4","para":"25-4","html":"
Costs of producing advertising are incurred during production rather than when the advertising takes place.
","snippet":"Costs of producing advertising are incurred during production rather than when the advertising takes place.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:27fbb10ee50eb5b7f50c45b90df387092034bf220d9b72832f5c0f226db16ecf","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4085f057d35fdb97dcc9cf08bdfc819c41cc77047c955c29c8a6a2162d5234c6","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Communicating Advertising","paragraphs":[{"citation":"720-35-25-5","para":"25-5","html":"
Costs of communicating advertising are not incurred until the item or service has been received and shall not be reported as expenses before the item or service has been received. For example:
  1. a
    The costs of television airtime shall not be reported as advertising expense before the airtime is used. Once it is used, the costs shall be expensed.
  2. b
    The costs of magazine, directory, or other print media advertising space shall not be reported as advertising expense before the space is used. Once it is used, the costs shall be expensed.
","snippet":"Costs of communicating advertising are not incurred until the item or service has been received and shall not be reported as expenses before the item or service has been received. For example:\n(a) The costs of television…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:eed8cf01f1e87c93f5b73e9499c9be7a739407a74c3a1c5d0b9368c0fbbb8d0b","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a42ab0cdc375a84ac0bb9557523354bfbb45d6d1b5659bd32346a4e197b4c673","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},{"block":null,"heading":"Executory Contracts","paragraphs":[{"citation":"720-35-25-6","para":"25-6","html":"
As indicated in paragraph 720-35-15-4, some activities, such as product endorsements and sponsorships of events, 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 shall be accounted for in conformity with the guidance in this Subtopic.
","snippet":"As indicated in paragraph 720-35-15-4, some activities, such as product endorsements and sponsorships of events, may be performed pursuant to executory contracts. Costs incurred under executory contracts generally are re…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2091e86f38291212a8c6e88ae4ec0911979196f048398ff2789d6888eb011f40","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5d8901514ee648cf5b115b79731e8c80679b53785665787cf95b9b1b9883218c","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55da5c945da28d490f235b225b1ed4d3dbc47894d7d73eaf2202673367697a77","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:55da5c945da28d490f235b225b1ed4d3dbc47894d7d73eaf2202673367697a77","downloaded_from":"2026-09-10T00:48:46.128Z","last_downloaded_at":"2026-09-10T00:48:46.128Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147483356","source_sha256":"29acb4141a7f9526fa798c61c8f1e3f86596f6e5a8cd57a3239a71310be9e143"}}