Accounting treatment for capitalizing

Thank you for CA for bill word in regards to your venture capital pursuit in Historiographers ( westerly). In our introductory meeting, you requested this firm to research on the accounting treatment for capitalizing the accumulated Meatball marketing consultancy charges uncured and the round salaries. I am qualified to confirm that the marketing consultancy charges and the round salaries can be capitalized and amortized over more than one tax revenuepayer.In reaching this conclusion, I referred to relevant authority from codifications from the Financial accounting system Standards Board. In addition, I have also reviewed the documents provided to this firm during our earlier meeting. Facts The facts as was provided to us argon as follows Hesperian hired a high-priced marketing consultancy company, Medievalist, to come-up with an integrated marketing strategy for computer game Project. Medievalist was tasked to gain a very catchy slogan that Western will manipulation in a multimillion dollar advertising campaign long with opposite things.Before the winning slogan was developed, they had presented others that Western rejected as unsuitable for Projects image. Therefore, Western has Incurred a marketing expense of $750,000. Western wants to capitalize charges for the rejected phrases unless they reason that the rejected phrases were an integral embark on of developing the winning slogan. Western will also capitalize the costs of staff salaries of $300,000 for the time they spend in meetings with Medievalist. Western intends to amortize the capitalized amounts over the expected product-life f the game.Applicable Codifications The relevant codifications from Financial Accounting Standards Board (FAST) which addresses Westerns plans to capitalize the accumulated Medievalist charges and capitalize the staff salaries are as follows. Codification paragraph 720-15-55-3 The following costs that skill be incurred in conjunction with start-up activities are subject to the provisions of this Subtopic a. turn on costs, employee recompense-related costs, and consulting costs related to feasibility studies, accounting, legal, tax, and governmental affairs.Codification paragraph 720-15-45-1 Because is marketed to others, the expense shall be charged to cost of sales or a similar expense category. Codification paragraph 720-15-45-2 In an entitys balance sheet, capitalized software costs having a life of more than one year or one direct cycle shall be presented as another asset because the costs are an amortize intangible asset. Analysis Based on the provided facts of your venture stake in Western, it is clear that charges incurred through a consultancy contract with Medievalist is a part of the product placement under the implementation guidance paragraph.In addition, the staff salary is also a part of the implementation guidance paragraph as well. Recommendation Due to the shortness of time to turn this research labor movement arou nd, I signal that we see the more detailed invoices from Medievalist along with the billable hours of the staff salaries allocated to working on the marketing development of a catchy slogan. enchant call me at (415) 297-8060 , if you have any further questions concerning these findings.I also suggest that a follow up meeting next week to talk of the additional accumulation which may be needed to better come together this research into the accounting treatment of your situation. Sincerely, for Golden Gate & Associates, Spas IRS Circular 230 disclosure To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or pen to be used, and cannot be used, for the purpose of (I) avoiding any tax penalty or promoting, marketing or recommending to another party any transaction or matter addressed herein.