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Exhibit 1 Example showing effect of capitalization and amortization of consumer advertising expenditure (2000s) First year of use of new system 1998 1999 2000 2001
Exhibit 1 Example showing effect of capitalization and amortization of consumer advertising expenditure (2000s) First year of use of new system 1998 1999 2000 2001 Advertising expense as reported on income statement 900 1,200 1,800 2,400 Amortization for economic profit report 1998 300 300 300 1999 400 400 400 2000 600 600 2001 800 Advertising expense on economic profit report 1,300 1,800 Cumulative advertising expense (on income statement) 900 2,100 3,900 6,300 Less: cumulative amortization (economic profit report) 300 1,000 2,300 4,100 Capitalized advertising for economic profit calculation 1,600 2,200 of capital for economic profit report
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