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How do I disclose the change of advertising expense as an asset ?
I have been asked to to prepare a disclosure report on changing an advertising expense to an asset since the benefit of the expenditure will be available over a 4-yr period. So how do I disclose this and under what standard will it come ?
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What you are suggesting is that the expenditure is a prepayment but for that to work there would have to be time related packets of expenditure such as ads at various times. It is more likely the expenditure is an intangiable, that is an intellectual property has been created with the intention of using this property at various times
Great care must be taken as the value of an intangiable may disappear at any time due to change of circumstance, product, obsolence, fashion. There will need to be a clear plan and not just a generalisation aimed a deferring the expenditure and therefore improving the bottom line. |
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