Wiley GAAP 2019

24ASC 340 OTHER ASSETS AND DEFERRED COSTS

PERSPECTIVE AND ISSUES

Subtopics

ASC 340, Other Assets and Deferred Costs, contains four 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.

  NOTE: The revenue standard superseded most of ASC 340-20, Other Asset and Deferred Costs and created the new Subtopic ASC 340-40. That subtopic contains new cost capitalization guidance. When initially released, the revenue standard inadvertently superseded the ASC 340-20 guidance on when to recognize a liability. To rectify that oversight, ASU 2016-20 reinstates the guidance on the accrual of advertising costs and moves it to ASC 720-30, Other Expenses-Advertising Costs.

• ASC 340-40, Contracts with Customers, provides guidance on costs incurred related to a contract with a customer. It also covers amortization of assets arising from costs to obtain or fulfill a contract, and impairment of assets arising from costs to obtain or fulfill a contract. This Subtopic has been added by ASU 2014-09 and will be effective when ASU ...