FASB proposes improvements to accounting for episodic television series

^{Filed under: Assets, expenses, industry}

KPMG reports on the proposed ASU related to the cost capitalization for episodic TV series. The previously announced consensus-for-exposure has now been issued as an exposure draft by the FASB.

Applicability

Proposed ASU on Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350)

• All companies in the film production and distribution industry that produce or license content

Relevant dates

• Exposure draft issued November 7, 2018
• Comments due December 7, 2018

Key impacts

The proposed amendments would:

• Align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization
• Require that an entity reassess estimates of the use of a film for a film in a film group and account for any changes prospectively
• Require that an entity test films and license agreements for program material in 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

Report contents

• Applicability
• Key facts and impacts
• Episodic television series