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
When would production and mailing costs of bank statements be expensed
Answers
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
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
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
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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