Aligning its accounting guidance for costs related to producing films and episodic content with the accounting for television and online streaming services, the Financial Accounting Standards Board (“FASB”) has issued Accounting Standards Update (“ASU”) No. 2019-02, 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.
The standard is in response to major production and distribution model changes the entertainment industry has faced in recent years. Specifically, the amendments under ASU No. 2019-02 updates presentation requirements, requires an organization to offer new disclosures on produced or licensed content, and covers cash flow classification for license agreements.
ASU No. 2019-02 is effective for public business entities for fiscal years, including interim periods within such years, starting after December 15, 2019. All other entities must apply the standard to fiscal years and interim periods within such years starting after December 15, 2020. Early adoption is permitted.