ASC 230-926

Entertainment—Films

230 Statement of Cash Flows

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Source downloaded: 2026-09-09T23:12:53.235Z.Record version c6e7f9d35f9e. Effective date must be checked in the source.

In brief

IntermediatePresentation Cash flows Industry-specific

This Subtopic tells film production and distribution entities how to classify certain film-related cash flows in the statement of cash flows. Cash outflows for film costs, participation costs, exploitation costs, and manufacturing costs are operating activities—not investing—even though film costs are capitalized as assets. Amortization of film costs is added back in the reconciliation of net income to net cash flows from operating activities.

Key points (4)

The Subtopic addresses classification of costs incurred to produce and market films and presentation of film cost amortization in the statement of cash flows (230-926-05-1).
Scope follows the Entertainment—Films Overall Subtopic scope in Section 926-10-15 (230-926-15-1).
Cash outflows for film costs, participation costs, exploitation costs, and manufacturing costs are reported as operating activities (230-926-45-1).
Amortization of film costs is included in the reconciliation of net income to net cash flows from operating activities (230-926-45-1).

For students. The common misunderstanding is assuming that because film costs are capitalized as long-lived assets, the related cash outflows belong in investing activities; ASC 230-926-45-1 requires operating classification, with amortization added back under the indirect method.

film costs participation costs exploitation costs manufacturing costs operating activities classification amortization add-back indirect method reconciliation

Machine-generated study aid for ASC 230-926. Check the source paragraphs below.

230-926-05Overview and Background

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230-926-05-1

This Subtopic provides guidance to entities in the film production and distribution industry on the classification in the statement of cash flows of certain costs incurred to produce and market films. This Subtopic also provides guidance for presenting the amortization of film costs in the statement of cash flows.

230-926-15Scope and Scope Exceptions

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Overall Guidance

230-926-15-1

This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 926-10-15.

230-926-45Other Presentation Matters

Source downloaded: 2026-09-09T23:12:50.690Z.Record version eae589ea6d23. Effective date must be checked in the source.

Reporting Cash Flows

230-926-45-1

An entity shall report cash outflows for film costs, participation costs, exploitation costs, and manufacturing costs as operating activities in the statement of cash flows, and it shall include the amortization of film costs in the reconciliation of net income to net cash flows from operating activities.