How did Deka Lash account for advertising production costs?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
ogy, and customer service fees are recognized when earned.
Revenue related to product sales is recognized upon shipment of the product to the franchise. Franchises may be required to purchase certain product from the Company. These products may be supplied from an affiliated comp
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the company expenses advertising production costs as they are incurred. Advertising communication costs are expensed the first time the advertising takes place.
For a prospective franchisee, this means that Deka Lash recognizes advertising expenses immediately rather than capitalizing and amortizing them over a longer period. This accounting practice can impact the reported profitability in the company's financial statements.
The advertising expenses for Deka Lash for the years ending December 31, 2023, 2022, and 2021, were $283,157, $394,773, and $174,672, respectively. This provides insight into the company's investment in advertising and how it has changed over the past three years.