Advertising Costs: Capitalize or Expense? Abercrombie & Fitch Co. discloses in its annual report that The production of in-store photography and signage is expensed when the marketing campaign commences and all other advertising costs are expensed as incurred as components of marketing, general and administra- tive expense on the income statement. Discuss why the expensing of advertising costs is considered to be best practice. Can an argument be made that advertising costs should be capitalized?