Accountants' Handbook Volume Two: Special Industries and Special Topics, Eleventh Edition

Chapter 32. PRODUCERS OR DISTRIBUTORS OF FILMS

Paul Rosenfield, CPA

HISTORY OF GUIDANCE

In 1974, the American Institute of Certified Public Accountants (AICPA) issued Industry Accounting Guide Accounting for Motion Picture Films and Statement of Position (SOP) 79–4, "Accounting for Motion Picture Films," providing specialized reporting principles for the industry. In 1981, the Financial Accounting Standards Board (FASB) extracted those specialized principles and presented them in its Statement No. 53, "Financial Reporting by Producers and Distributors of Motion Picture Films." Between 1981 and 2000, the origin of the majority of a film's revenue expanded from distribution to movie theaters and free television to those outlets plus, for example, home video, satellite and cable television, and pay-per-view television, and international revenue has become more significant. Also in that period, application of Statement No. 53 has varied significantly. The FASB therefore asked the Accounting Standards Executive Committee (AcSEC) to develop an SOP to replace that Statement.

In response, AcSEC issued SOP 00–2, "Accounting by Producers or Distributors of Films," in June 2000, effective for fiscal years beginning after December 15, 2000, and the FASB simultaneously rescinded its Statement No. 53 in its Statement No. 139, "Rescission of FASB Statement No. 53 and Amendments to FASB Statements No. 63, 89, and 121." This chapter presents the accounting guidance in SOP 00–2.

REVENUE REPORTING

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