Robert Ltd was going through some difficult trading times and was barely breaking even. In attempting to improve sales, the company spent $500,000 on an advertising campaign during the current year in the hope that sales would significantly improve in the new year. Management decided that the cost of this campaign should be recorded as an asset so that the small current profit for the firm would not become a loss.

Required:

Discuss whether managements decision and reasoning are justified. Also, you need to explain your answer by referring to the Conceptual Framework for Financial Reporting.