What are Advertising Expense adjustments?
Advertising Expense adjustments are factory charges/receivables used for “Local” advertising that are accelerated into the year the vehicle was purchased. Do all Advertising charges qualify as Trade Discounts? Some do but most do not. In fact, advertising charges typically create the most debate regarding treatment, allocation, qualification and distribution of these expenses. Every factory program is different and each program differs by region and/or local market. Green excels at understanding and tracking these programs. Those Advertising Expenses which qualify as Trade Discounts receive automatic consent. Those which do not qualify as Trade Discounts require IRS filing fee of $1,500.00 per return. Why does Green Outsourcing match VIN’s to Advertising Expenses? Primarily for audit protection. Especially if the dealers uses LIFO, you can trace the base cost/adjustment back to each vehicle. How should I record the treatment of Trade Discounts or Advertising Adjustments? Generally, for
