Summary of Statement No. 50
Financial Reporting in the Record and Music Industry (Issued 11/81)
Summary
This Statement extracts the specialized accounting principles and
practices from AICPA Statement of Position 76-1, Accounting
Practices in the Record and Music Industry, and establishes
standards of financial accounting and reporting for licensors and
licensees in the record and music industry. If a license agreement
is, in substance, an outright sale and collectibility of the
licensing fee is reasonably assured, this Statement requires the
licensor to recognize the licensing fee as revenue. This Statement
requires a licensee to record minimum guarantees as assets and
charge them to expense in accordance with the terms of the license
agreement. It also establishes accounting standards for artist
compensation cost and cost of record masters.