Record companies' justification for the practice of recouping certain costs from an artist was that the label had invested its resources and had borne the financial risk of making and promoting the album. Some labels argued that this was similar to a joint venture in which production costs and overhead were repaid before the partners divided any profits. As an accounting matter, Compass Records recorded its recoupable costs as an asset on its balance sheet. On average, the company expensed those costs after two years.