Where to Find Advertising Expense in the Financial Statements [Video]

Because advertising expense is an expense you might think it would appear on a company's income statement. But advertising expense doesn't appear as a line item on the income statement for most publicly-traded companies. Instead, advertising expense is buried within the line item "selling, general, and administrative expense" (aka SG&A expense). Thus, to find a company's advertising expense you need to go to the notes that accompany the financial statements. In the notes, companies will typically tell you the amount of advertising expense that was included in selling, general, and administrative expense. Deferred advertising costs (advertising costs that have NOT yet been expensed) are typically included in the prepaid expenses account on the balance sheet. Thus, advertising costs are reported as follows: -Advertising expense is reported as part of SG&A expense on the income statement -Deferred advertising / prepaid advertising is reported as part of prepaid expense on the balance …