23 ASC 340 OTHER ASSETS AND DEFERRED COSTS
PERSPECTIVE AND ISSUES
ASC 340, Other Assets and Deferred Costs, contains three subtopics:
- ASC 340-10, Overall, which provides guidance on certain deferred costs and prepaid expenses.
- ASC 340-20, Capitalized Advertising Costs, which provides guidance on the initial measurement, amortization, realizability, and disclosure of direct response advertising costs reported as assets.
- ASC 340-30, Insurance Contracts that Do Not Transfer Insurance Risk, which provides guidance on how to apply the deposit method of accounting when it is required for insurance and reinsurance contracts that do not transfer risk.
The guidance in ASC 340-10 is limited to a discussion of the nature of prepaid expenses and guidance for preproduction costs related to long-term supply arrangements. The specific guidance for many other deferred costs is included in various other areas of the Codification.
Scope and Scope Exceptions
Per ASC 340-20-15-4:
“Direct-response advertising activities exclude advertising that, though related to the direct-response advertising, is directed ...