FASB proposal addresses accounting for TV series
the proposal is describED in ProposED accounting Standards UPDate, Entertainment — Films — Other assets — Film Costs (Subtopic 926-20) and Entertainment — Broadcasters — Intangibles — Goodwill and Other (Subtopic 920-350): improvements to accounting for Costs of Films and License Agreements for Program Materials.
This alignment would be accomplishED by allowing all production costs as specifiED in FASB ASC Subtopic 926-20 to be capitalizED for episodic television series, as they are for films. Under current GAAP, production costs specifiED in Subtopic 926-20 for an episodic television series are capitalizED up to the amount of revenue contractED for each episode in the initial market until persuasive evidence exists that revenue from secondary markets will occur or an entity can demonstrate a history of earning such revenue in that market.
Under the proposal, an entity would be requirED to test films and license agreements for program material within the scope of Subtopic 920-350 for impairment at a film group level when the film or license agreement is prEDominantly monetizED with other films and license agreements. A film group is the lowest level at which identifiable cash flows are largely independent of the cash flows of other films and license agreements. the proposal also would: