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When to recognize company conference expenses?

We have a weeklong meeting starting on Feb. 29th. However, our fiscal year end is 2/29. How would the meeting expense be recognized? All on 2/29, or prorated so that only 1 day is recognized? What accounting pronouncement covers this?

Answers

Jerry Jorgensen
Title: none
Company: none
(none, none) |

I believe that the correct accounting is to recognize 1 day of expense in the current fiscal year and the remaining days in the next fiscal year. The cost of the meeting should be recognized over the period of time that it occurs.

Ross Anderson, CPA, MBA
Title: Controller
Company: TFS Capital
(Controller, TFS Capital) |

I agree with Jerry.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

1. Are the amounts material in the first place?
2. What happened re last year's conference? Could you have a situation where one fiscal year could contain expenses for more than one annual conference?
3. See 1 above again.

Anonymous
(Senior Manager, Accounting) |

The amounts are material. Expenses are north of $1-2M. Part of the expenses are for video productions shown during the conference, as well of stage set-up, presentation support, etc. Would those be prorated as well? Unfortunately, last year fell within the same month and fiscal year, so the expenses were all captured at month-end.

Thanks for the feedback!

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon, based on your answers I agree with Jerry and Ross.

You may face another interesting issue-in which month/fiscal year was this expense budgeted originally? If the whole amount was a Feb 2016 budget amount, you will end up with a timing variance compared to actual when you defer the expenses. And does the 2016/17 budget include 4/5ths of the conference expense? Otherwise you'll have an adverse timing variance next fiscal year:)

Anonymous
(Senior Manager, Accounting) |

Unfortunately, only last year's was budgeted for this year. Thanks, all!

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