# ASC 720-35-25: Other Expenses — Advertising Costs — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/720/35/#25-recognition) 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): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:55da5c945da28d490f235b225b1ed4d3dbc47894d7d73eaf2202673367697a77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 720-35-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/720/35/#25-recognition) SEC content: no ##### [720-35-25-1](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:b8ba6ae370a8211846cae4981268378b455321f92421cdab58aae9f128d271fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/720/35/#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. ##### [720-35-25-1A](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-1A) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:4f008df7f6ffad0341aed5079f2c4d5eb47f5e37a196208d0f8a5db1a1caeeab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Tangible Assets ##### [720-35-25-2](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:87d14afda7fdbe231bd8b451f083ef3ca4b43cd1e3eee8de709125d595b5fb1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [720-35-25-3](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:680973d5fdecb8921450e38f9b2c36694d1e3e112086c05fb94986d4f01f84a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Producing Advertising ##### [720-35-25-4](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:27fbb10ee50eb5b7f50c45b90df387092034bf220d9b72832f5c0f226db16ecf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Costs of producing advertising are incurred during production rather than when the advertising takes place. #### Communicating Advertising ##### [720-35-25-5](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:eed8cf01f1e87c93f5b73e9499c9be7a739407a74c3a1c5d0b9368c0fbbb8d0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Executory Contracts ##### [720-35-25-6](https://asc.understandingaccounting.org/asc/720/35/#720-35-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:48:46.128Z to 2026-09-10T00:48:46.128Z Record version: sha256:2091e86f38291212a8c6e88ae4ec0911979196f048398ff2789d6888eb011f40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [720-35-15-4](https://asc.understandingaccounting.org/asc/720/35/#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.