Log Out

FASB Changes Accounting for Episodic TV Series

March 7, 2019

The Financial Accounting Standards Board (FASB) issued an accounting standards update (PDF) to adjust the way companies account for the production costs of films and episodic content produced for TV and online streaming services. In recent years, FASB noted, the entertainment industry has undergone a major change in its production and distribution models, as streaming services such as Netflix and Hulu have introduced subscription-based revenue models. However, the current accounting guidance offers different capitalization requirements for content production for entertainment industry companies. For films, production costs are capitalized, but for episodic content (such as a TV series that shows a new episode each week), production costs are capitalized subject to a constraint based on contracted revenues in the initial and secondary markets.