Wiley GAAP 2014: Interpretation and Application of Generally Accepted Accounting Principles

42   ASC 720 OTHER EXPENSES

Perspective and Issues

Subtopics

Scope and scope exceptions

Definitions of Terms

Concepts, Rules, and Examples

ASC 720-15, Start-up Costs

ASC 720-30, Real and Personal Property Taxes

Example of accrued real estate taxes

ASC 730-35, Advertising Costs

PERSPECTIVE AND ISSUES

Subtopics

ASC 720, Other Expenses, contains nine subtopics:

• ASC 720-10, Overall, which merely lists the other subtopics
• ASC 720-15, Start-Up Costs
• ASC 720-20, Insurance Costs
• ASC 720-25, Contributions Made
• ASC 720-30, Real and Personal Property Taxes
• ASC 720-35, Advertising Costs
• ASC 720-40, Electronic Equipment Waste Obligations
• ASC 720-45, Business and Technology Reengineering
• ASC 720-50, Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers.

Scope and Scope Exceptions

ASC 720-15. ASC 720-15 applies to all nongovernmental entities. Routine ongoing efforts to improve existing quality of products, services, or facilities are not start-up costs. The subtopics lists specific activities that are not considered start-up costs and should be accounted for in accordance with other existing authoritative literature.

1. Ongoing customer acquisition costs, such as policy acquisition costs (see Subtopic 944-30)
2. Loan origination costs (see Subtopic 310-20)
3. Activities related to routine, ongoing efforts to refine, enrich, or otherwise improve upon the qualities of an existing product, service, process, or facility
4. Activities related to mergers or acquisitions