# ASC 405-928: Liabilities — Entertainment—Music Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/405/928/) 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): 2026-09-10T00:17:48.299Z to 2026-09-10T00:17:59.597Z Record version: sha256:394283773d56470ca92b44b71aeb3bd4b9cdba54ed5fb67827a9b63cd7af7631 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-928: Liabilities — Entertainment—Music ### Machine-generated study aids ```json { "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.", "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" ] } ``` Source downloaded (UTC): 2026-09-10T00:17:48.299Z to 2026-09-10T00:17:48.299Z Record version: sha256:1e001cbffbd8b91767d2782cad421de1393062a18b2f365db59f15e33c2addd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-928-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/405/928/#05-overview-and-background) SEC content: no ##### [405-928-05-1](https://asc.understandingaccounting.org/asc/405/928/#405-928-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:48.299Z to 2026-09-10T00:17:48.299Z Record version: sha256:6e04505ceff12fe72b057a0febea2fd194b78a2f8da8aa01f140950c77de54ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A licensee entity may enter into a [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.") with an owner or licensor of a [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.") 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. Source downloaded (UTC): 2026-09-10T00:17:52.259Z to 2026-09-10T00:17:52.259Z Record version: sha256:8d6db8ba6c84cef874fe4ab40b4aae3dd0193e3f1e030c3c65e72caa32ea1f77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-928-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/405/928/#15-scope-and-scope-exceptions) SEC content: no ##### [405-928-15-1](https://asc.understandingaccounting.org/asc/405/928/#405-928-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:52.259Z to 2026-09-10T00:17:52.259Z Record version: sha256:2dbe13fd65f9741299c104872d8e8ee46f576f79860a76bc8e35090c950eb0a1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 928-10-15. Source downloaded (UTC): 2026-09-10T00:17:59.597Z to 2026-09-10T00:17:59.597Z Record version: sha256:ee1c76b290f7634d99581559ea5cc06bfa653849fbcb15bc8c614241a27ce32f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 405-928-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/405/928/#25-recognition) SEC content: no #### Licensee Accounting ##### [405-928-25-1](https://asc.understandingaccounting.org/asc/405/928/#405-928-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:17:59.597Z to 2026-09-10T00:17:59.597Z Record version: sha256:0df244a1c6c7ba75bd14d4db54e7963eab8700f35fc117144c7ced7034de8e27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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.