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Technology Stocks : Hewlett-Packard (HPQ)
HPQ 25.52-2.9%10:37 AM EST
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To: The Duke of URL© who wrote (1848)10/3/2002 11:25:42 PM
From: Oeconomicus  Read Replies (2) of 4345
 
All that for just this?

CAPITALIZE VERSUS EXPENSE

Advertising costs

Generally, advertising costs are expensed due to the uncertainty of their future economic benefits

In selected cases where the future benefits are more certain, advertising costs should be capitalized

OK, Mr. Accounting Expert - what is the "certain" future benefit that would allow or require Dell to capitalize advertising expenses? Capping advertising is just not done by an honestly run company without an extremely unusual set of circumstances where a particular expenditure can be shown to have a clear and direct future period benefit. And, frankly, I can't think of a single situation where it would be justified, unless you are talking about inventories of brochures, product displays or other tangible marketing materials that are assets until they are consumed. Can you think of such a situation? I'm happy to listen, but just suggesting they are doing it and then doing a Google search for rules doesn't cut it. I've got the rules right here on my bookshelf. Give me a basis for them to do it - otherwise you must be suggesting they are cooking the books and/or that they are simply stupid. My original question, BTW, was whether you thought they were stupid. To cook the books in such a way would be truly stupid, especially now.
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