How AcSEC's new SOP tightens accounting and reporting on advertising costs

Currently, there is diversitys in practice related to the accounting for advertising costs. Many companies expense the costs for advertising as incurred, but others capitalize these costs and amortize them in current and subsequent periods. While certain FASB statements provide guidance on the reporting of such costs for a few specific activies (such as leasing, loan origination, motion picture film promotion) and industries (such as cable television, insurance, real estate), there has been no broad guidance that specifies the accounting for adverting costs in general. Then new AICPA statement of Position 93‐7, “Reporting on Advertising Costs,” provides that guidance. This article details its demands.