# ASC 405-926-05: Liabilities — Entertainment—Films — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

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## ASC 405-926-05: 05 Overview and Background

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##### [405-926-05-1](https://asc.understandingaccounting.org/asc/405/926/#405-926-05-1)

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This Subtopic provides guidance to entities in the film production and distribution industry on the accounting for costs incurred to compensate third parties involved in the production of a film, such as actors or writers. These costs are referred to as [participation costs](https://asc.understandingaccounting.org/glossary/p/#participation-costs "Parties involved in the production of a film may be compensated in part by contingent payments based on the financial results of a film pursuant to contractual formulas (participations) and by contingent amounts due under provisions of collective bargaining agreements (residuals). Such parties are collectively referred to as participants, and such costs are collectively referred to as participation costs. Participations may be given to creative talent, such as actors or writers, or to entities from whom distribution rights are licensed."). This Subtopic also addresses the accounting for costs incurred to make insignificant changes to a film after its initial availability to a customer.