Learning the new math; New accounting requirements have changed the way sales and marketing managers use promotional incentives in calculating the bottom line.(Emerging Issues Task Force, Financial Accounting Standards Board)(Brief Article)

Advertising Age, August, 2001 by Lunde, Robert L.; Schultz, Don E.

We are going to have to totally rethink how marketing and sales promotion programs are developed and implemented. The reason? New accounting requirements so fundamental they promise to change the way sales and marketing mangers use such promotional tools as off-invoice allowances, couponing, frequent purchaser programs and the like and to require a rewriting of most sales promotion texts.

The new requirements, issued by the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB), indicate when a marketing or sales expenditure is classified as an ``expense'' and when it is classified as a ``reduction in revenue.''

Known as EITF Issue 00-14 (``Accounting for Certain Sales Incentives'') and EITF Issue 00-25 (``Vendor Income...

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