America Online (AOL) is a leader in the Internet access provider industry. In 1996, the company changed
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Question:
1. What is the general treatment of advertising and promotion costs?
2. Why are these costs normally expensed in the period incurred even though they are incurred with the intention of generating future revenues?
3. Why did they expense these costs over a two-year period?
4. Why did AOL choose a different approach?
5. Why did the company decided to change its method?
6. What do you think about the civil penalty of $3.5 million leveled by the SEC four years after AOL changed its method?
7. What is the SEC’s role in the financial reporting process?
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
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