Advertising expenditure is one of the most important budget items supporting marketing activities for most companies, and may be treated as an intangible asset. Through the impact on demand and costs, advertising activities affect the firm’s pricing and output decisions as well as the firm’s market value (Tannous, 1997; Chauvin & Hirschey, 1994). Despite the significant economic importance of advertising expenditure, not much attention has been given to the value relevance of advertising expenditure and the impact of advertising expenditure disclosure on firms’ market value. Most of the empirical studies for value relevance of advertising expenditure have been conducted using data from the US and UK Academic research on the value relevance of advertising expenditure in Canada is nonexistent. The accounting standard applied in Canada is different from that used in prior US and UK studies. . Canada adopts Canadian GAAP before 2011, and switches to IFRS from 2011onwards. Both regimes do not require firms in Canada to disclose advertising expenditure. However, most US studies use data before 1994 to analyze value relevance of advertising expenditure. Before 1994, disclosing advertising expenditure is mandatory for US firms under US GAAP. The UK evidence uses data before 2005, during which period UK firms still adopt UK GAAP. Although UK. GAAP does not require companies to disclose advertising expenditure, unlike IFRS, different accounting standards can lead to different financial data reporting and different results. In addition, studies on the impact of voluntary disclosure of advertising expenditure on market value are nonexistent. Furthermore, Canada has a more stable financial system than that of the US and UK In this context, the objective of this thesis is to initiate research on the important dimension of advertising expenditure among Canadian firms. The findings of this thesis will enhance understanding of the relationship between advertising expenditure and market value, and companies’ decisions to voluntarily disclose advertising expenditure on their market value.

本研究先探討各種廣告費用會計處理之理論基礎（即：選擇性資本化、全部資本化、全部費用化）及其對財務報表及財務比率之影響（以統一企業公司之財務資料為例），並簡介美國之廣告費用會計處理的沿革及美國會計師協會(AICPA)之會計準則理事會(AcSEC)在1994年12月29日發布之SOP No. 93－7，Reporting on Advertising Costs，再以實證方式來研究目前國內廣告費用之會計處理有無不妥之處。研究主題如下： 　　1.廣告支出是否具有經濟效益？ 　　2.廣告支出對銷貨收入之影響是否具有遞延效果？ 　　3.廣告支出的遞延效果之持續期間大約有多久？ 　　資料年份（期間）從民國75年1月1日到民國82年12月31日止之上市公司半年報財務資料，共計十六期。本研究以第ｔ期之銷貨收入為因變數，以第ｔ期到第ｔ-ｎ期之廣告費用為自變數，即視銷貨收入為廣告費用之函數。樣本選取標準為民國75年1月1日到民國82年12月31日止，上市公司半年報之全部銷貨收入及廣告費用。 　　本研究之實證結果彙總如下： 　　1.廣告支出之多寡為行業特性之表徵。 　　2.廣告費用具有經濟效益。 　　3.廣告費用對銷貨收入具有遞延之影響力。 　　4.就全體上市公司自75年到82年之財務資料而言，廣告費用並不是構成及解釋銷貨收入之重要因素；但就食品業而言，廣告費用是行業特性之表徵，而在「續繼經營」與「企業在可預見的未來將持續地廣告」的兩個假設下其對銷貨收入之影響力約為二到三期（一年到一年半）。

The rapid increase in the expenditure on below-the-line promotions (consumer and trade promotions, direct marketing, sponsorship and public relations) relative to above-the-line advertising (television, radio, print, outdoor and cinema) in South Africa has earmarked a new era of integrated marketing communication strategies across all sectors. Ultimately, this strategic shift has brought about a need to better understand the relationship between above-the-line advertising and below-the-line promotions and to measure the impact of such changes on company sales/profits over the long-term. In the research undertaken amongst 250 senior marketing, brand and product managers of South African brand-owned companies, the relationship between above-the-line advertising and below-the-line promotions in the marketing of South African products and services was investigated across six different economic sectors. It was evident from the findings that most brand-owned companies currently integrate above-the-line advertising and below-the-line promotion activities. The study shows that most brand-owned companies in South Africa combine press, radio and television (above-the-line) with consumer promotions (below-the-line). The most frequently used above-the-line advertising medium is television, which is also seen as the most important mode to support long-term brand building amongst consumers. In turn, print is regarded as the most important above-the-line mode to support trade franchise building. Most frequently used below-the-line modes include direct marketing and public relations. Direct mail and cooperative advertising are seen as the most important below-the-line consumer and trade franchise building modes respectively. Although marketing communication expenditure is positively skewed towards above-the-line adverstising, most recent trends show a gradual increase in the use of below-the-line promotions. To prevent a brand's sales/profits from decreasing over the long-term due to too high below-the-line promotional expenditure, the study encourages a sound balance between above-the-line advertising and below-the-line promotions. Although the ideal ratio of above-the-line advertising to below-the-line promotions is related to the nature of the product and service being marketed, the extent of competitive activity in the market and the frequency of purchase, amongst many other salient factors, the study regards a 60/40 ratio as the most ideal for building long-term brands. On the other hand, a ratio of 35/65 is regarded as the critical point at which company sales/profits may deteriorate because of too high below-the-line promotional spending. In conclusion it can be said that the marketing communication industry of South Africa has entered a period of integrated marketing communication practices which requires sound marketing communication budget strategies conducive to the long-term survival of South African products and services. / Business Management / D. Com. (Marketing Communication)

The rapid increase in the expenditure on below-the-line promotions (consumer and trade promotions, direct marketing, sponsorship and public relations) relative to above-the-line advertising (television, radio, print, outdoor and cinema) in South Africa has earmarked a new era of integrated marketing communication strategies across all sectors. Ultimately, this strategic shift has brought about a need to better understand the relationship between above-the-line advertising and below-the-line promotions and to measure the impact of such changes on company sales/profits over the long-term. In the research undertaken amongst 250 senior marketing, brand and product managers of South African brand-owned companies, the relationship between above-the-line advertising and below-the-line promotions in the marketing of South African products and services was investigated across six different economic sectors. It was evident from the findings that most brand-owned companies currently integrate above-the-line advertising and below-the-line promotion activities. The study shows that most brand-owned companies in South Africa combine press, radio and television (above-the-line) with consumer promotions (below-the-line). The most frequently used above-the-line advertising medium is television, which is also seen as the most important mode to support long-term brand building amongst consumers. In turn, print is regarded as the most important above-the-line mode to support trade franchise building. Most frequently used below-the-line modes include direct marketing and public relations. Direct mail and cooperative advertising are seen as the most important below-the-line consumer and trade franchise building modes respectively. Although marketing communication expenditure is positively skewed towards above-the-line adverstising, most recent trends show a gradual increase in the use of below-the-line promotions. To prevent a brand's sales/profits from decreasing over the long-term due to too high below-the-line promotional expenditure, the study encourages a sound balance between above-the-line advertising and below-the-line promotions. Although the ideal ratio of above-the-line advertising to below-the-line promotions is related to the nature of the product and service being marketed, the extent of competitive activity in the market and the frequency of purchase, amongst many other salient factors, the study regards a 60/40 ratio as the most ideal for building long-term brands. On the other hand, a ratio of 35/65 is regarded as the critical point at which company sales/profits may deteriorate because of too high below-the-line promotional spending. In conclusion it can be said that the marketing communication industry of South Africa has entered a period of integrated marketing communication practices which requires sound marketing communication budget strategies conducive to the long-term survival of South African products and services. / Business Management / D. Com. (Marketing Communication)