{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/405/928/","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","number":"405-928","topic":"405","title":"Entertainment—Music","area":"Liabilities","paragraphs":3,"summary":"This subtopic tells a music licensee how to account for fees owed under a license agreement with the owner/licensor of a record master or music copyright that grants the right to sell or distribute records or music for a stipulated fee. Its single rule: license fees that are not fixed in amount before the agreement expires must be estimated and accrued, license by license.","concepts":["license agreement","record master","music copyright","licensee fees","accrual of estimated fees","license-by-license basis","record club free records"],"categories":["Recognition","Industry-specific","Subsequent measurement"],"level":"intermediate","topic_title":"Liabilities","sections":[{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"405-928-05-1","para":"05-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">A licensee entity may enter into a <a href=\"/glossary/l/#license-agreements\" class=\"term\" title=\"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.\"><span>license agreement</span></a> with an owner or licensor of a <a href=\"/glossary/r/#record-master\" class=\"term\" title=\"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.\"><span>record master</span></a> or music copyright granting the licensee the right to sell or distribute records or music for a stipulated fee. This Subtopic provides guidance for the accounting and reporting by the licensee of fees paid under such license arrangements.</div></div>","snippet":"A licensee entity may enter into a license agreement with an owner or licensor of a record master or music copyright granting the licensee the right to sell or distribute records or music for a stipulated fee. This Subto…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e04505ceff12fe72b057a0febea2fd194b78a2f8da8aa01f140950c77de54ef","downloaded_from":"2026-09-10T00:17:48.299Z","last_downloaded_at":"2026-09-10T00:17:48.299Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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timestamps","source_key":"1943274/2147478957","source_sha256":"86ed3ac473452ce97b4dc440519c3089f7f25cddd578fe2c00059c9f0b458eec"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1e001cbffbd8b91767d2782cad421de1393062a18b2f365db59f15e33c2addd6","downloaded_from":"2026-09-10T00:17:48.299Z","last_downloaded_at":"2026-09-10T00:17:48.299Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478957","source_sha256":"86ed3ac473452ce97b4dc440519c3089f7f25cddd578fe2c00059c9f0b458eec"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"405-928-15-1","para":"15-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section <a altsource=\"GUID-BB5D14AD-F23D-4D8C-A722-F487B8B7BABD.ditamap\" class=\"ditamap\">928-10-15</a>.</div></div>","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 928-10-15.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2dbe13fd65f9741299c104872d8e8ee46f576f79860a76bc8e35090c950eb0a1","downloaded_from":"2026-09-10T00:17:52.259Z","last_downloaded_at":"2026-09-10T00:17:52.259Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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id=\"sfr_E46B53BE-6E93-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Any fees required by a licensing agreement (for example, for free records distributed by a record club in excess of a stipulated number) that are not fixed in amount prior to the expiration date of the agreement shall be estimated and accrued on a license-by-license basis by the licensee. </span></span></div></div>","snippet":"Any fees required by a licensing agreement (for example, for free records distributed by a record club in excess of a stipulated number) that are not fixed in amount prior to the expiration date of the agreement shall be…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0df244a1c6c7ba75bd14d4db54e7963eab8700f35fc117144c7ced7034de8e27","downloaded_from":"2026-09-10T00:17:59.597Z","last_downloaded_at":"2026-09-10T00:17:59.597Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478544","source_sha256":"f253bb6aa7ded7da0f0919b0fe45f64e24f5b65c94f25300f36f39f288861dc8"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3523e155ef4784435c87fb388ad731efab5ad06b0d095b8ecf1645bc6b399baf","downloaded_from":"2026-09-10T00:17:59.597Z","last_downloaded_at":"2026-09-10T00:17:59.597Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not 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Its single rule: license fees that are not fixed in amount before the agreement expires must be estimated and accrued, license by license.","key_points":["A licensee may obtain the right to sell or distribute records or music from the owner or licensor of a record master or music copyright for a stipulated fee, and this Subtopic governs the licensee's accounting and reporting for those fees (405-928-05-1).","Scope follows the Overall Subtopic scope in Section 928-10-15 (405-928-15-1).","Fees required by a licensing agreement that are not fixed in amount prior to the agreement's expiration date must be estimated and accrued by the licensee (405-928-25-1).","The estimate and accrual must be made on a license-by-license basis, not in the aggregate (405-928-25-1).","An example of such an unfixed fee is the amount owed for free records distributed by a record club in excess of a stipulated number (405-928-25-1)."],"categories":["Recognition","Industry-specific","Subsequent measurement"],"audience_level":"intermediate","student_note":"This is a one-rule industry subtopic: the licensee cannot wait for the fee to become fixed—unfixed license fees must be estimated and accrued as incurred. The common misunderstanding is aggregating estimates across licenses; the guidance requires a license-by-license computation.","related_topics":["928-10","928-340","928-405","450-20","926"],"key_concepts":["license agreement","record master","music copyright","licensee fees","accrual of estimated fees","license-by-license basis","record club free records"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2e54add5de867f81314e5356aa1e592f11ccf3344422581276a37bb0150902d3","downloaded_from":"2026-09-10T00:17:48.299Z","last_downloaded_at":"2026-09-10T00:17:59.597Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"720-928","title":"Entertainment—Music","topic_title":"Other 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established by retrieval timestamps"}},{"number":"928-10","title":"Overall","topic_title":"Entertainment—Music","score":0.7655,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c8f49777f5286ea6b4d1ee1f8d269d9faec204836da604de92d332845fc55121","downloaded_from":"2026-09-10T02:12:12.808Z","last_downloaded_at":"2026-09-10T02:12:18.919Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"440-928","title":"Entertainment—Music","topic_title":"Commitments","score":0.7581,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:7457c311cfc0cc2bb996cef4e120515d4cc492f55193503b8274d754d0cd7af1","downloaded_from":"2026-09-10T00:25:52.692Z","last_downloaded_at":"2026-09-10T00:26:04.387Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},{"number":"340-928","title":"Entertainment—Music","topic_title":"Other Assets and Deferred 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