USA Capitalize transaction costs (attorney's fees) of private common stock offering?

[am30]

The information (mainly from a Deloitte document) I've found so far indicates that costs (referred to as Transaction Costs in the Deloitte doc), such as attorney's fees, incurred in preparation and submission for state approval of a private common stock offering can be capitalized and amortized for some period. This is a small privately held C-corporation.

My question: Is this correct and, if so, over how many years can it be amortized?

Thank you for any assistance.

 

[Fidget]

Under IFRS common stock issuance is in the realms of financial instruments as an equity transaction, so it's IAS 32, and it states that associated transaction costs should be treated as a deduction from equity, or in other words, not capitalised.

Whether this is the same under US GAAP, I don't know.

Do you have a link to the document you've been looking at? I'm quite interested in reading it.

 

[am30]

Thanks. Not sure about US GAAP. This Deloitte doc addresses Start-up & Development costs. Although, this company is 5 years old, it is still in "start-up mode." Can't post links yet (need 10 posts). The title is: 'Accounting for and Tax Treatment of Start-up and Development Costs.'

So, you're saying for IFRS, you would deduct these costs from the equity investments? Would this be debited to the common stock account directly? Also, some of this stock will be converted from loans, i.e. the lenders (personal investors) will take stock for payment of their loans.

Thanks again!

 

[Fidget]

I think this might be it and, if so, it's based on U.S GAAP by its reference to "ASC":

http://www.deloitte.com/assets/dcom...r_accounting for and tax treatment_100610.pdf