Kenso Limited has traditionally capitalised a portion of its advertising costs as a deferred asset. The amount
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Kenso Limited has traditionally capitalised a portion of its advertising costs as a deferred asset. The amount of advertising cost capitalised this year was $300 000, and the new company's policy is to amortise the capitalised amount to expense at 20 percent per year. An accountant suggested to the company's CFO that the policy of capitalising advertising should be ended because the future economic benefit from the expenditures is not clearly determinable. The CFO wants to know what effect such policy changes would have (ignore taxes).
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Financial Accounting An Integrated Approach
ISBN: 9780170349680
6th Edition
Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson
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