# ASC 350-920-05: Intangibles—Goodwill and Other — Entertainment—Broadcasters — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/350/920/#05-overview-and-background)

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## ASC 350-920-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/350/920/#05-overview-and-background)

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##### [350-920-05-1](https://asc.understandingaccounting.org/asc/350/920/#350-920-05-1)

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This Subtopic addresses the accounting and reporting by a [broadcaster](https://asc.understandingaccounting.org/glossary/b/#broadcaster "An entity or an affiliated group of entities that transmits radio or television program material.") licensee for the rights acquired under a [license agreement](https://asc.understandingaccounting.org/glossary/l/#license-agreement "A typical license agreement for program material (for example, features, specials, series, or cartoons) covers several programs (a package) and grants a television station, group of stations, network, pay television, or cable television system (licensee) the right to broadcast either a specified number or an unlimited number of showings over a maximum period of time (license period) for a specified fee.") for program material. Guidance is provided on:

1.  a
    
    When to recognize the asset acquired under such license agreements in the financial statements
    
2.  b
    
    At what amounts to record the asset
    
3.  c
    
    Amortization of the capitalized amounts recorded.
    

Guidance also is provided in this Subtopic on the accounting for [network affiliation agreements](https://asc.understandingaccounting.org/glossary/n/#network-affiliation-agreement "A broadcaster may be affiliated with a network under a network affiliation agreement. Under the agreement, the station receives compensation for the network programming that it carries based on a formula designed to compensate the station for advertising sold on a network basis and included in network programming. Program costs, a major expense of television stations, are generally lower for a network affiliate than for an independent station because an affiliate does not incur program costs for network programs.") that are terminated.

##### [350-920-05-2](https://asc.understandingaccounting.org/asc/350/920/#350-920-05-2)

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See paragraph [920-350-25-2](https://asc.understandingaccounting.org/asc/350/920/#350-920-25-2) for guidance on recording the obligation incurred by a broadcaster licensee under a program license agreement.

##### [350-920-05-3](https://asc.understandingaccounting.org/asc/350/920/#350-920-05-3)

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A typical license agreement for program material grants a licensee the right to broadcast a specified number or an unlimited number of showings during the license period for a fee. Ordinarily, the fee is paid in installments over a period generally shorter than the license period. The agreement usually contains a separate license for each program in the package. The license expires at the earlier of the last allowed telecast or the end of the license period. The licensee pays the required fee whether or not the rights are exercised. If the licensee does not exercise the contractual rights, the rights revert to the licensor with no refund to the licensee. The license period is not intended to provide continued use of the program material throughout that period but rather to define a reasonable period of time within which the licensee can exercise the limited rights to use the program material.