《美国会计案例（上财课堂讨论，英文）》.docVIP

SEC Institutes Proceedings Against AOL Over Its Accounting Treatment of Advertising Costs LEAD STORY-DATELINE: The Wall Street Journal, May 16, 2000. America Online, Inc. (AOL) provides Internet access to millions of subscribers throughout the world. AOL is listed on the New York Stock Exchange (NYSE) and is registered with the Securities Exchange Commission (SEC) pursuant to the Securities Exchange Act of 1934. During its fiscal years ended June 30, 1995 and June 30, 1996, AOL undertook extensive advertising efforts to rapidly expand its customer base. These efforts included distributing millions of computer disks containing AOL start-up software and paying computer equipment manufacturers to bundle the startup software with their computers. The company capitalized the expenditures as an asset, Deferred Membership Acquisition Costs (DMAC), thus deferring the advertising costs as an asset rather than an expense. Effective July 1, 1995, AOL changed the period over which it amortized these acquisition costs from twelve and eighteen months to twenty-four months, resulting in an increase in reported net income of $48.106 million. As a result of this accounting change, AOL reported net income of $30 million for the fiscal year ended June 30, 1996, rather than a loss of $18 million. This aggressive accounting method allowed AOL to report profits for six of the eight quarters during fiscal 1995 and 1996. According to the SEC, if AOL would have expensed the costs, as required under generally accepted accounting principles (GAAP) , they would have reported losses in each of the 8 quarters in fiscal years 1995 and 1996. By September 1996, these deferred advertising costs reached $385 million. Finally, in October 1996, AOL announced that it wrote-off the $385 million balance of capitalized DMAC at September 30, 1996 because the company believed it no longer has an adequate accounting basis to support recognizing deferred subscriber acquisition costs as an asset, and would exp