Sports Sponsors Treatment

[theahmer]

Assalam O Alaikum All,
Guys n Gals i've come with this query and hope that u will help me getting out of it
What is the accounting treatment for sponsoring Sports and what type of expenses r these either Capital expenditure or Revenue and if revenue then r these Selling and marketing or General and administrative expenses?
For example PEPSI supports Pakistan Cricket team, National Bank sponsors Pakistan Hockey Team similarly KPT(Karachi Port Trust) supports SNOOKER players. Now how do these companies treat these expenses.
Plz reply me soon.
ALLAH HAFIZ

Make efforts not excuses!

Edited by - theahmer on Apr 23 2004 34742 PM

[jbladeus]

Advertising expense - Under the heading of Selling and Marketing expenses.

________________________
Arrrgh... it sure's gonna be mighty rough sailin' today ... mates!

[theahmer]

<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>
Advertising expense - Under the heading of Selling and Marketing expenses.

________________________
Arrrgh... it sure's gonna be mighty rough sailin' today ... mates!
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>
Dear Guybrush,
Thanks for ur reply, it really helped me but still i have following question
1 Does these types of expenses affect the GOODWILL of the business, if yes then how do we calculate it?
Anyways thanks again
ALLAH HAFIZ

Make efforts not excuses!

[SNIPER]

<BLOCKQUOTE id=quote><font size=1 face="Verdana, Tahoma, Arial" id=quote>quote<hr height=1 noshade id=quote>
1 Does these types of expenses affect the GOODWILL of the business, if yes then how do we calculate it?
<hr height=1 noshade id=quote></BLOCKQUOTE id=quote></font id=quote><font face="Verdana, Tahoma, Arial" size=2 id=quote>

Hello!

Offcourse that type of expenses affect the goodwill of the business. But you donnot need to to calculate the goodwill of a busines in its normal course of trading. The only factor that raises the calculation of goodwill is when the business is being sold. Even then there is no set rule for the calculation of goodwill as it is just a market valuation.

Correct me if i'm wrong.

Regards
Mubeen



Edited by - sniper on Jul 13 2004 62102 PM

[Moon]

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The main purpose of the advertisement expenses is to promote one's business and get return. such return can be in the form of goodwill, the related question of which does not arise in the normal course of nusiness. the other form of return is the income. follow> more projection> more orders> more income, got?

Invest your hard work today for a success benefit tomorrow

[Kaash_ACMA]

Hi,,, I think these expense r revenue expenditure,, they must come under the head of Marketing Expenses,, well that is not effecting ur goodwill directly but the way ur comp. gets feedback from marketing ,,, now its up to that company how will they treat there customers and manage their product,,, I will tell u in detail soon about this thing,, okies, ,babyes,,,

Never look back If you wanna do something,,, but sometimes do it for ur heart,,,