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Advertising costs are generally presented as part of selling, general, and administrative expenses in a reporting entity's income statement. As discussed in ASC 720-35-05-1, advertising costs can either be expensed as incurred or expensed the first time the advertising takes place. The accounting policy selected from these two alternatives must be applied consistently to similar kinds of advertising activities. ASC 720-35-50-1 requires that disclosures include, at a minimum:
  • The accounting policy selected for reporting advertising, indicating whether such costs are expensed as incurred, or the first time the advertising takes place
  • The total amount charged to advertising expense for each period an income statement is presented
New guidance
Upon adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606), ASC 720-35-50-1 will be superseded. The accounting and disclosure requirements of ASU 2014-09 are discussed in PwC’s Revenue from contracts with customers guide.

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