first time advertising takes place

Expenses1

1. 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).