advertising costs

Expenses3

1. 720-10Overall720 Other Expenses

   ASC 720-10 is the Overall subtopic of the Other Expenses Topic, which is essentially an organizing shell. It lists the eight subtopics housed under Topic 720 — Overall, Start-Up Costs, Insurance Costs, Contributions Made, Real and Personal Property Taxes, Advertising Costs, Electronic Equipment Waste Obligations, and Business and Technology Reengineering — and states that each contains standalone guidance with no interrelationship among them.

2. 720-35Advertising Costs720 Other Expenses

   ASC 720-35 governs how entities account for advertising costs in annual financial statements. The core rule: advertising costs are expensed either as incurred or the first time the advertising takes place, applied consistently as an accounting policy to similar kinds of advertising activities (720-35-25-1); no advertising asset is capitalized, though sales materials may be treated as prepaid supplies and cooperative-advertising obligations must be accrued when the related revenue is recognized. The notes must disclose the policy elected and total advertising expense for each income statement presented (720-35-50-1).

3. 720-926Entertainment—Films720 Other Expenses

   This Subtopic governs how film production and distribution entities account for certain costs incurred to develop and market a film, including overall deal costs and exploitation costs. Costs of overall deals that cannot be identified with specific projects are charged to expense as incurred over the related time period (720-926-25-1), advertising costs follow Subtopic 720-35 (720-926-25-2), and all other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).