Related Posts
What agency is doing the new Twizzler ads?
what state in the US has the best police force?
Additional Posts in Accounting
When does working weekends start?
New to Fishbowl?
Download the Fishbowl app to
unlock all discussions on Fishbowl.
unlock all discussions on Fishbowl.
I would say no, but interesting question. Also, the matching principle sort of went out the window with new rev rec.
Also, marketing is below GM and usually isn’t part of COGS. The COGS would still match the revenue in this case, just the SG&A expense wouldn’t but that doesn’t have to.
Gonna lean with vp1. The marketing is not directly linked to the cost of making a sale and should not be capitalized.
Yeah, my instinct is that it should be expensed, since it can’t be directly linked to a sale. However in an ecom environment you can easily track demand based on orders and with certain marketing analytics tools you can even track what advertisement drove a customer to your website. You could make a case that it would be more appropriate to capitalize but I think the current guidance says expense.
Rising Star
I can see what you’re saying in parts of Rev Rec 606 with commission costs per each sale if the paid affiliate marketing program exists by the e-commerce company and therefore, you could link for each sale on a very theoretical level.
Then I think you could make a case for capitalizing under 606.... but that’s so immaterial so I would only look at major sales.
I’ve also not seen a e-commerce company make the connection to direct paid affiliate marketing programs and capitalizing those costs under 606 but it’s very interesting what you brought up depending on how those direct affiliate marketing programs are paid.
I just think it’s immaterial for now.
I’ve seen sales rep commissions linked for 606 but that is because it’s basically payroll and on the basis that the commissions are awarded per sale.