United States

Proposed accounting for episodic television series


Current accounting guidance provides different capitalization requirements for film production in the entertainment industry based on the type of content being produced. The Financial Accounting Standards Board (FASB) recently issued a proposed Accounting Standards Update (ASU), 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 (a consensus of the FASB Emerging Issues Task Force), which, if finalized, will align the accounting for production costs of an episodic television series with the accounting for production costs of films whereby all production costs as specified in Subtopic 926-20 would be capitalized. 

Further, the proposed ASU would require that an entity test films and license agreements within the scope of Subtopic 920-350 for impairment at a film group level, when the film is predominantly monetized with other films and license agreements. Among other amendments, the proposed ASU also would require new disclosures about content that is either produced or licensed.

The proposed ASU is available for comment until December 7, 2018. The effective date of the proposed ASU will be determined after the Task Force considers stakeholder feedback on the proposed ASU.