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.