# ASC 340-928-35: Other Assets and Deferred Costs — Entertainment—Music — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/340/928/#35-subsequent-measurement) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T23:57:26.624Z to 2026-09-09T23:57:26.624Z Record version: sha256:dd14fe69cf65a870ac03f913a4c0e59aeb99b465a6543d772c1b76990e4e5863 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 340-928-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/340/928/#35-subsequent-measurement) SEC content: no #### Licensor Accounting ##### [340-928-35-1](https://asc.understandingaccounting.org/asc/340/928/#340-928-35-1) Pending content: no Source downloaded (UTC): 2026-09-09T23:57:26.624Z to 2026-09-09T23:57:26.624Z Record version: sha256:d8acd89f2fe95e2c76a962d4647d3815cb7b3db0c53b07669104c10dbc6e62e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [928-720-25-1](https://asc.understandingaccounting.org/asc/720/928/#720-928-25-1), [advance royalties](https://asc.understandingaccounting.org/glossary/a/#advance-royalty "An amount paid to music publishers, record producers, songwriters, or other artists in advance of their earning royalties from record or music sales. Such an amount is based on contractual terms and is generally nonrefundable.") shall be charged to expense as subsequent [royalties](https://asc.understandingaccounting.org/glossary/r/#royalties "Amounts paid to record producers, songwriters, or other artists for their participation in making records and to music publishers for their copyright interest in music. Amounts for artists are determined by the terms of personal service contracts negotiated between the artists and record entities and usually are determined based upon a percentage of sales activity and license fee income, adjusted for estimated sales returns. Royalties for publishing are based on the copyright or other applicable laws, but the requirements of the law may be modified by licenses issued by the publishers.") are earned by the artist. Any portion of such advances that subsequently appear not to be fully recoverable from future royalties to be earned by the artist shall be charged to expense during the period in which the loss becomes evident. ##### [340-928-35-2](https://asc.understandingaccounting.org/asc/340/928/#340-928-35-2) Pending content: no Source downloaded (UTC): 2026-09-09T23:57:26.624Z to 2026-09-09T23:57:26.624Z Record version: sha256:ccfef1572dfb581060f080ddf428e6ead39f8d2573192aca8d09a2b73c6967f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the [record master](https://asc.understandingaccounting.org/glossary/r/#record-master "The master tape resulting from the performance of the artist. It is used to produce molds for commercial record production and other tapes for use in making cartridges, cassettes, DVDs, and reel tapes. The costs of producing a record master include the cost of the musical talent (musicians, vocal background, and arrangements); the cost of the technical talent for engineering, directing, and mixing; costs for the use of the equipment to record and produce the master; and studio facility charges. Under the standard type of artist contract, the record company bears a portion of the cost and recovers a portion of the cost from the artist out of designated royalties earned. However, either party may bear all or most of the cost.") cost recognized as an asset shall be amortized over the estimated life of the recorded performance using a method that reasonably relates the amount to the net revenue expected to be recognized. #### Licensee Accounting ##### [340-928-35-3](https://asc.understandingaccounting.org/asc/340/928/#340-928-35-3) Pending content: no Source downloaded (UTC): 2026-09-09T23:57:26.624Z to 2026-09-09T23:57:26.624Z Record version: sha256:25373b2a686864b81fd3cb3b309103ab72e6aee75fc55cc531f7e5d722def390 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Minimum guarantees](https://asc.understandingaccounting.org/glossary/m/#minimum-guarantee "An amount paid in advance by a licensee to a licensor for the right to sell or distribute records or music.") paid in advance, and reported as an asset by the licensee in accordance with paragraph [928-340-25-4](https://asc.understandingaccounting.org/asc/340/928/#340-928-25-4), shall subsequently be charged to expense in accordance with the terms of the [license agreement](https://asc.understandingaccounting.org/glossary/l/#license-agreements "Contractual arrangements entered into by an owner (licensor) of a record master or music copyright with a licensee granting the licensee the right to sell or distribute records or music for a fixed fee paid to the licensor or for a fee based on sales of records or music. License agreements are modifications of the compulsory provisions of the copyright law."). If all or a portion of the minimum guarantee subsequently appears not to be recoverable through future use of the rights obtained under the license, the nonrecoverable portion shall be charged to expense.