ASC

ASC 720-940

Financial Services—Brokers and Dealers

720 Other Expenses

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In brief

IntermediateIndustry-specificRecognitionFinancial statement presentation

This short subtopic addresses how brokers and dealers in securities account for mutual fund distribution costs. Its only substantive instruction is a cross-reference: for 12b-1 fees and contingent deferred sales charges, apply the cost guidance in Subtopic 946-720 (Investment Companies—Other Expenses). Its scope follows the broker-dealer Overall Subtopic scope in Section 940-10-15.

Key points (4)
  • The subtopic covers accounting for mutual fund distribution costs incurred by broker-dealers (720-940-05-1).
  • Scope is the same as the broker-dealer Overall Subtopic, Section 940-10-15 (720-940-15-1).
  • For 12b-1 fees and deferred sales charges, the applicable cost guidance is in Subtopic 946-720 (720-940-25-1).
  • The subtopic itself contains no independent recognition, measurement, or disclosure requirements beyond the cross-reference.

For students. Recognize this as a pointer subtopic, not a source of rules: if asked how a broker-dealer accounts for 12b-1 fees or deferred sales charges, the answer is found in 946-720. A common mistake is assuming 720-940 permits capitalizing distribution costs; it prescribes nothing on its own.

mutual fund distribution costs12b-1 feesdeferred sales chargesbroker-dealersother expensescross-reference guidance

Machine-generated study aid for ASC 720-940. Check the source paragraphs below.

720-940-00Status

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720-940-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
12b-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-05-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-15-1AddedAccounting Standards Update No. 2014-0905/28/2014
940-720-25-1AddedAccounting Standards Update No. 2014-0905/28/2014

720-940-05Overview and Background

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720-940-05-1
This Subtopic addresses the accounting for mutual fund distribution costs for brokers and dealers in securities (broker-dealers).

720-940-15Scope and Scope Exceptions

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720-940-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 940-10-15.

720-940-25Recognition

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720-940-25-1
With respect to 12b-1 fees and deferred sales charges, see the cost guidance in Subtopic 946-720.

Related subtopics