{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/720/946/#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":"720-946","subtopic_title":"Financial Services—Investment Companies","section":{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":"Investment Adviser's Offering Costs When both 12b-1 Fees and Contingent-Deferred Sales Fees Are Not Received","paragraphs":[{"citation":"720-946-25-1","para":"25-1","html":"
Paragraph 946-720-25-4 provides guidance on accounting by investment advisers who are reimbursed, for offering costs paid, through both 12b-1 fees and contingent-deferred sales fees. Accordingly, the accounting by those investment advisers for offering costs are outside the scope of the guidance in paragraphs
946-720-25-2 through 25-3
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","snippet":"Paragraph 946-720-25-4 provides guidance on accounting by investment advisers who are reimbursed, for offering costs paid, through both 12b-1 fees and contingent-deferred sales fees. Accordingly, the accounting by those …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5f3d6ff4dd949c3a52a30633d9aa0bd4068a4f8dfabfc52a9a2a1313c7c90e3f","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"citation":"720-946-25-2","para":"25-2","html":"
Benefits expected from the expenditures paid by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and contingent-deferred sales fees do not meet the definition of an asset of the investment adviser as provided in FASB Concepts Statement No. 6, Elements of Financial Statements. Accordingly, such offering costs paid by the investment adviser shall be expensed as incurred. Initial offering costs paid by an investment adviser that does not receive both 12b-1 fees and contingent-deferred sales fees are start-up costs of the investment adviser, which should be accounted for in accordance with Subtopic 720-15.
Transition date:(P) December 16, 2024; (N) December 16, 2025Transition guidance:
105-10-65-9 Costs incurred by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and contingent-deferred sales fees shall be expensed as incurred. Initial offering costs paid by an investment adviser that does not receive both 12b-1 fees and contingent-deferred sales fees are start-up costs of the investment adviser, which should be accounted for in accordance with Subtopic 720-15.
","snippet":"Benefits expected from the expenditures paid by an investment adviser in connection with the distribution of shares of a fund in circumstances in which the investment adviser does not receive both 12b-1 fees and continge…","pending":true,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7fcc2cf4f47c65b27a15de714239b6cc7aef464e098d6443ea4427a0c93067f8","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:557fd23eab799f6bc40be2c59fe3ea56c9b9f6e9ed71179f49f7120340d90c39","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"block":null,"heading":"Distribution Costs for Funds","paragraphs":[{"citation":"720-946-25-3","para":"25-3","html":"
The guidance in paragraph 946-720-25-2 applies also to distribution plans of open-end investment companies permitted under Rule 12b-1. Some closed-end interval funds incur distribution-related fees (similar to 12b-1 fees) and impose early withdrawal charges (similar to contingent-deferred sales fees) pursuant to exemptive orders issued under the Investment Company Act of 1940. In addition, certain funds not subject to regulation under the Investment Company Act of 1940 also may incur fees and impose charges that are substantially the same as 12b-1 fees and contingent-deferred sales fees, respectively. In those instances, an entity shall defer and amortize the incremental direct costs and shall account for offering costs incurred for distribution of those funds in a manner similar to the accounting specified in paragraph 946-720-25-4.
","snippet":"The guidance in paragraph 946-720-25-2 applies also to distribution plans of open-end investment companies permitted under Rule 12b-1. Some closed-end interval funds incur distribution-related fees (similar to 12b-1 fees…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:daf16ecc55eb9881b114b2acfd21dc0127ff658fb4ad5e207f3967ae81c031b6","downloaded_from":"2026-09-10T01:11:53.415Z","last_downloaded_at":"2026-09-10T01:11:53.415Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477725","source_sha256":"1f0a996a3c005ea0fe385497f24cf875cb84d7f29e829900f6660b985a7f58aa"}},{"citation":"720-946-25-4","para":"25-4","html":"
Distributors of mutual funds that do not have a front-end load shall defer and amortize the incremental direct costs and shall expense the indirect costs when incurred.
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