Advertising Costs

AAA

DEFINITION of 'Advertising Costs '

A category included in financial accounting to represent expenses associated with promoting an industry, entity, brand, product name, or specific products or services in order to stimulate a desire to buy the entity's products or services. Advertising costs include space in print and online venues, broadcast time, radio time and direct mail advertising. Advertisng costs will in most cases fall under SG&A expenses on a company's income statement.

INVESTOPEDIA EXPLAINS 'Advertising Costs '

The American Institute of Certified Public Accountants' (AICPA) Accounting Standards Executive Committee (AcSEC) released a Statement of Position (SOP 93-7) in 1993 establishing standards for companies that incur advertising costs. SOP 93-7 concluded that advertising costs should be recorded as expenses rather than assets: "Reporting the costs of all advertising as expenses in the periods in which those costs are incurred, or the first time the advertising takes place."

RELATED TERMS
  1. Direct Marketing

    A form of advertising in which physical marketing materials are ...
  2. Financial Statements

    Records that outline the financial activities of a business, ...
  3. Accounting

    The systematic and comprehensive recording of financial transactions ...
  4. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  5. Certified Public Accountant - CPA

    A designation given by the American Institute of Certified Public ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
Related Articles
  1. Delivery duty paid (DDP) is a shipping term.
    Investing

    What does DDP Mean?

    Delivery duty paid (DDP) is a shipping term specifying that the seller is responsible for all costs associated with delivery of the goods to the buyer. It is usually used when goods are exported ...
  2. Fundamental Analysis

    What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health.
  3. Fundamental Analysis

    What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio.
  4. Active Trading Fundamentals

    What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk.
  5. Technical Indicators

    What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect relative financial stability.
  6. Investing Basics

    What is considered to be a bad gearing ratio?

    Understand the basics of gearing, including the net gearing ratio, what constitutes a bad gearing ratio and how this figure reflects financial stability.
  7. Active Trading Fundamentals

    What does the gearing ratio say about risk?

    Find out why lenders and investors pay close attention to a firm's gearing ratios, and why both too much and too little borrowing can be risky.
  8. Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
    Personal Finance

    How The Internet Web Ad Industry Works

    Over the past 10 years, advertising strategies have evolved as a result of technological development as the internet has provided new channels for advertisers to reach a larger audience.
  9. For two years, Tinder has been able to stay afloat without relying on any kind of revenue stream. Now, the free match-making mobile app is exploring a new money-making model in an effort to cash in on the international $2 billion-a-year online dating industry.
    Personal Finance

    Tinder to Start Swiping for Cash?

    For two years, Tinder has been able to stay afloat without relying on any kind of revenue stream. Now, the free match-making mobile app is exploring a new money-making model in an effort to cash ...
  10. As technology has evolved, the landscape of the music industry has changed from radio broadcasts to mp3 and now streaming services.
    Entrepreneurship

    Will Pandora And Spotify Disrupt Music Royalties?

    As technology has evolved, the landscape of the music industry has changed from radio broadcasts to mp3 and now streaming services.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center