Does anyone understand why Direct-response is capitalized? Doesn’t make sense to me.
it will lead to further sales
well any advertising will lead to more sales…but direct response is more traceable, so you can actually quantify it. i.e if if spend $1000 on direct response and it takes several accounting periods to get all responses in terms of increased sales, then the cost would be better matched if it was spread over those accounting periods (capitalized)
thanks. makes sense