ASC

ASC 230-920

Entertainment—Broadcasters

230 Statement of Cash Flows

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In brief

IntermediateCash flowsPresentationIndustry-specific

This Subtopic tells broadcasters how to classify cash paid for program license rights in the statement of cash flows. Under 230-920-45-1, cash outflows to obtain rights under a license agreement for program material are operating activities, and the amortization of the capitalized license costs is included in the reconciliation of net income to net cash flows from operating activities.

Key points (4)
  • A broadcaster licensee reports cash outflows for costs incurred to obtain rights under a program material license agreement as operating activities, not investing activities (230-920-45-1).
  • Amortization of capitalized license agreement costs is included in the reconciliation of net income to net cash flows from operating activities (230-920-45-1).
  • The Subtopic addresses both classification of the cash outflows and presentation of the amortization of the capitalized costs (230-920-05-1).
  • Scope follows the Broadcasters Overall Subtopic scope in Section 920-10-15 (230-920-15-1).

For students. Exam trap: program rights look like a long-lived asset purchase, so students classify the payments as investing — but GAAP requires operating classification for broadcasters, with the related amortization added back in the indirect-method reconciliation.

broadcaster licenseelicense agreement for program materialprogram rightsoperating activities classificationcapitalized license costsamortization add-backindirect method reconciliation

Machine-generated study aid for ASC 230-920. Check the source paragraphs below.

230-920-00Status

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230-920-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
BroadcasterAddedAccounting Standards Update No. 2019-0203/06/2019
License AgreementAddedAccounting Standards Update No. 2019-0203/06/2019
920-230-05-1AddedAccounting Standards Update No. 2019-0203/06/2019
920-230-15-1AddedAccounting Standards Update No. 2019-0203/06/2019
920-230-45-1AddedAccounting Standards Update No. 2019-0203/06/2019

230-920-05Overview and Background

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230-920-05-1
This Subtopic provides guidance to a broadcaster licensee on the classification in the statement of cash flows of certain costs incurred for the rights acquired under a license agreement for program material. This Subtopic also provides guidance for presenting the amortization of the capitalized costs of license agreements.

230-920-15Scope and Scope Exceptions

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Overall Guidance

230-920-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 920-10-15.

230-920-45Other Presentation Matters

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Reporting Cash Flows

230-920-45-1
A broadcaster licensee shall report cash outflows for the costs incurred to obtain the rights acquired under a license agreement for program material as operating activities in the statement of cash flows, and it shall include the amortization of the capitalized costs of license agreements for program material in the reconciliation of net income to net cash flows from operating activities.

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