The cost of the sale,
spread over the benefit.
Aleq capitalizes the commission that won the deal and amortizes it across the period it benefits — not expensed in a lump the month you paid it.
Paid once. Expensed over the benefit.
A commission isn't an expense the month it's paid — it buys a customer relationship that lasts for years. Below is Allison's commission on the Cyberdyne deal.
Every payout, on its own schedule.
Each commission carries its own capitalized balance and amortization, tied back to the rep and the contract that earned it. Aleq keeps the whole deferred-cost asset reconciled — what was paid, what's amortized, what remains — and writes off the balance the moment a contract churns.
| Payee · contract | Capitalized | / mo | Remaining |
|---|---|---|---|
| Allison W.C-7015 · 48 mo | $22,680 | $473 | $18,896 |
| Brent K.C-6904 · 48 mo | $31,400 | $654 | $21,582 |
| Marcus D.C-7102 · 48 mo | $15,000 | $313 | $13,750 |
| Priya N.C-6711 · 48 mo | $27,900 | $581 | $16,849 |
| Deferred cost asset | $484,400 | $31,400 | $1,740,000 |
How long is the benefit? You decide.
The amortization period is the judgment that drives the whole schedule — the initial term, or the longer life of the customer when renewals aren't paid a commensurate commission. Aleq drafts the period of benefit from your renewal rates and churn, runs the commensurate test, and holds the call for your sign-off.
Renewal commissions are paid at 4% against 9% on new business — not commensurate — so the asset benefits the expected customer relationship, not just the initial term. Median tenure across the cohort is 47 months; amortize over 48.
However you sell, the cost follows the deal.
New logos, renewals, channel, self-serve — what you capitalize and how long it benefits depends on the motion. Aleq runs the right treatment for each.
The cost of winning the deal — capitalized.
A commission paid to land a new contract is an incremental cost of obtaining it, so it's capitalized and amortized over the period it benefits — often longer than the initial term, because the customer relationship outlasts it.
- Incremental cost paid only because the deal closed → capitalized.
- Period of benefit amortized over expected customer life.
- Loaded payroll taxes on the commission ride along.
Renewal pay turns on the commensurate test.
If a renewal commission is commensurate with the new-business commission, the relationship is already captured and the renewal cost is expensed. If it isn't, the renewal is a fresh asset. Aleq runs the test and drafts the call.
- Commensurate renewal rate ≈ new rate → expense as incurred.
- Not commensurate lower renewal rate → capitalize separately.
- The ratio test drafted against ASC 340-40-25, held for sign-off.
Partner referral fees follow the same rule.
A referral fee or channel payout paid to win a deal is just as incremental as an internal commission. Aleq capitalizes it against the same contract and amortizes it over the same period of benefit — one schedule, internal and external alike.
- Referral fees incremental to the deal → capitalized.
- Same period amortized over the customer's expected life.
- One schedule internal and partner costs, side by side.
Short-lived deals are expensed as incurred.
Where the amortization period would be a year or less, the ASC 340-40 practical expedient lets you expense the cost as incurred. Aleq applies it by policy — no asset to set up for a deal that won't outlive the year.
- One-year expedient applied where benefit ≤ 12 months.
- By policy elected and applied consistently.
- No micro-assets small short-life costs expensed cleanly.
What controllers and auditors ask.
What counts as a capitalizable cost?
Only the incremental costs of obtaining a contract — costs you wouldn't have incurred if the deal hadn't closed, like sales commissions and the payroll taxes on them. Aleq matches each payout to its contract and tests that it's genuinely incremental before capitalizing.
How is the period of benefit determined?
From the contract term, expected renewals, and whether renewal commissions are commensurate. Where they aren't, the benefit extends to the expected customer life. Aleq drafts the period with its basis and holds it for your sign-off.
Do you apply the one-year practical expedient?
Where you've elected it. If the amortization period would be twelve months or less, Aleq expenses the cost as incurred — no asset for a deal that won't outlive the year.
What happens when a contract churns?
The remaining capitalized balance is impaired and written off in the period the customer leaves. Aleq catches the churn from the contract status and books the write-off, so the deferred asset never overstates.
Is the deferred-cost roll-forward auditable?
Every period exports the roll-forward — opening balance, additions, amortization, write-offs, closing balance — tied to each rep and contract, with the source payout and provenance attached.
Put your commissions on Aleq.
Connect payroll and your CRM. Watch Aleq capitalize the cost of every deal, amortize it over the period of benefit, run the commensurate and expedient tests, and keep the deferred-cost roll-forward tied out — the period of benefit drafted for your sign-off.