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Accounting Case - Competition Paper

            PricewaterhouseCoopers LLP ("PwC ") appreciates the opportunity to provide comments on the Essentials, Inc. M-Commerce Strategy and Deployment Proposal relating to the development of new sales channels. We provide the following specific comments and suggestions on potential accounting issues Essentials may face with respect to FASB ASC 350-40, Internal Use Software, ASC 340-20 Capitalized Advertising Costs, ASC 605-50, Customer Payments and Incentives, ASC 310-20, Non-refundable Fees and Other Costs, and AICPA SOP 98-1 Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. .
             After discussion among our associates, we have also conducted a financial analysis and review of the selected financial information and the letter to shareholders provided to us. The resulting information and data, are used as the basis for our recommendations on additional information to be included in the M-Commerce Proposal. .
             Accounting for Costs Related to Sales Channel Development .
             FASB ASC 350-40 refers us to apply AICPA SOP 98-1 which provides that within website or application development, there are three distinct phases inclusive of: the planning stage, the development stage, and the operating/post-implementation stage. Within the web development phase there are four distinct phases inclusive of the infrastructure and application development phases and the graphic and content development phases. During the individual stages it requires that we account for the costs of the development of new technology based sales channels as follows: .
             - Planning Stage: Expense costs as incurred.
             - Application Development Stage: Capitalize infrastructure, application, and graphic development costs, web domain acquisition and registration costs " Expense content, server, and hosting costs as incurred or over the period of benefit .
             - Post Implementation/Operating Stage: Expense costs as incurred.

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