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When would production and mailing costs of bank statements be expensed

Jeff Salamone's Profile

For a financial institution, when would the cost of producing and mailing the statements be expensed? Would it be in the month the statement is for (e.g., Dec's statement cost would be accrued in Dec), OR would it be in the month the work is performed (e.g., the statement vendor produces and mails the Dec statement the following January)? Matching vs accrue when the work is performed. I've asked this question before and received conflicting answers from Audit and Accounting professionals. It's amazing that accounting doesn't seem to have a clear answer any more on even things that seem simple..


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

I believe expensing for the month of the statement is taking the matching principle a little too far, no disrespect intended. If at the end of the year I request a copy of all my statements, do you break the fee into 12 months? To satisfy the auditor, include your policy to not accrue for printing in the notes to the financial statements. I would be very surprised if the senior reviewing the notes does not strike the statement.

Ted Monohon
Title: VP -Finance / Controller
Company: Fantex
(VP -Finance / Controller, Fantex) |

I think Regis is right and this is being over thought. When the printing and mailing costs are incurred would be the primary driver in expense recognition (in the month following the statement date). If this is being done by a 3rd party, it would be driven by the contract terms or invoicing date.

Good luck

Stephen Turk
Title: Principal
Company: Stephen Turk, CPA
(Principal, Stephen Turk, CPA) |

I agree with prior comments - expense as incurred.
There is a question in the AICPA Technical Practice Aids relating to audit fees that may be instructive, since it addresses a somewhat similar question as to whether audit fees relate to the year being audited or to the period when the services are rendered:
" .05 Accrual of Audit Fee
 Inquiry—A CPA has been engaged to audit the financial statements of a client company. The audit is being conducted after year end. Is it proper to accrue the audit fee as an expense of the year under audit?
 Reply—According to FASB Concepts Statement No. 6, Elements of Financial Statements, paragraph 145, "The goal of accrual accounting is to account in the periods in which they occur for the effects on an entity of transactions and other events and circumstances, to the extent that those financial effects are recognizable and measurable." The audit fee expense was incurred in the period subsequent to year end. Therefore, it is properly recorded as an expense in the subsequent period. However, fees incurred in connection with planning the audit, together with preliminary procedures (for example, confirmation work) would be accruable for the year under audit."


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