Accounting for direct acquisition costs of capital

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Apr 11, 2008, 11:14 AM

BillyMac

New Member

Join Date: Apr 2008

Posts: 1

Accounting for direct acquisition costs of capital

Can you capitalize the direct cost (commissions) of bringing new members into a country club?

Answers

Apr 12, 2008, 05:35 PM	#2

morgaine300

Accounting Expert

Join Date: Feb 2008

Posts: 768

Well, I'm trying to figure out how country club members are capital.

Presumbly the members are paying membership dues. Which is part of your revenue. Therefore the cost of commissions is part of the cost of your revenues. i.e. Cost of Sales. That's a revenue expenditure, not a capital expenditure. Something like commissions for bringing in new members is basically marketing for the club. There's nothing special here that would turn that into an asset.

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