# ASC 720-926: Other Expenses — Entertainment—Films

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/720/926/)

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## ASC 720-926: Other Expenses — Entertainment—Films

### Machine-generated study aids

```json
{
  "summary": "This Subtopic governs how film production and distribution entities account for certain costs incurred to develop and market a film, including overall deal costs and exploitation costs. Costs of overall deals that cannot be identified with specific projects are charged to expense as incurred over the related time period (720-926-25-1), advertising costs follow Subtopic 720-35 (720-926-25-2), and all other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).",
  "key_points": [
    "The Subtopic covers compensation and other costs incurred to develop and market a film, including participation costs and exploitation costs (720-926-05-1).",
    "Scope follows the Entertainment—Films Overall Subtopic scope in Section 926-10-15 (720-926-15-1).",
    "Costs of overall deal arrangements that cannot be identified with specific projects are expensed as incurred over the related time period (720-926-25-1).",
    "Advertising costs are accounted for under Subtopic 720-35 (720-926-25-2).",
    "All other exploitation costs, including marketing costs, are expensed as incurred (720-926-25-3).",
    "An entity must disclose its methods of accounting for exploitation costs (720-926-50-1)."
  ],
  "categories": [
    "Recognition",
    "Disclosure",
    "Industry-specific"
  ],
  "audience_level": "intermediate",
  "student_note": "The key takeaway is that film marketing and other exploitation costs are period expenses, not capitalized film costs — a common error is assuming launch advertising can be deferred and matched against future film revenue. Note advertising is carved out to Subtopic 720-35's rules rather than governed here.",
  "related_topics": [
    "926-10",
    "926-20",
    "720-35",
    "926-330"
  ],
  "key_concepts": [
    "exploitation costs",
    "overall deal arrangements",
    "participation costs",
    "advertising costs",
    "marketing costs",
    "expense as incurred",
    "film production and distribution"
  ]
}
```

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## ASC 720-926-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/720/926/#05-overview-and-background)

SEC content: no

##### [720-926-05-1](https://asc.understandingaccounting.org/asc/720/926/#720-926-05-1)

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This Subtopic addresses the accounting by entities in the film production and distribution industry for certain compensation and other costs incurred to develop and [market](https://asc.understandingaccounting.org/glossary/m/#market "A distribution channel within a certain territory. Examples of markets include theatrical exhibition, home video, pay television, free television, and the licensing of film-related products.") a film. Those costs include participation and [exploitation costs](https://asc.understandingaccounting.org/glossary/e/#exploitation-costs "All direct costs (including marketing, advertising, publicity, promotion, and other distribution expenses) incurred in connection with the distribution of a film.").

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## ASC 720-926-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/720/926/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [720-926-15-1](https://asc.understandingaccounting.org/asc/720/926/#720-926-15-1)

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 926-10-15.

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## ASC 720-926-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/720/926/#25-recognition)

SEC content: no

#### Overall Deals

##### [720-926-25-1](https://asc.understandingaccounting.org/asc/720/926/#720-926-25-1)

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An entity may enter into an [overall deal](https://asc.understandingaccounting.org/glossary/o/#overall-deal "An arrangement in which an entity compensates a producer or other creative individual for the exclusive or preferential use of that party's creative services.") arrangement. An entity shall charge the costs of overall deals that cannot be identified with specific projects to expense as they are incurred over the related time period.

#### Exploitation Costs

##### [720-926-25-2](https://asc.understandingaccounting.org/asc/720/926/#720-926-25-2)

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An entity shall account for advertising costs in accordance with the provisions of Subtopic 720-35.

##### [720-926-25-3](https://asc.understandingaccounting.org/asc/720/926/#720-926-25-3)

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All other [exploitation costs](https://asc.understandingaccounting.org/glossary/e/#exploitation-costs "All direct costs (including marketing, advertising, publicity, promotion, and other distribution expenses) incurred in connection with the distribution of a film."), including marketing costs, shall be expensed as incurred.

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## ASC 720-926-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/720/926/#50-disclosure)

SEC content: no

#### Exploitation Costs

##### [720-926-50-1](https://asc.understandingaccounting.org/asc/720/926/#720-926-50-1)

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An entity shall disclose its methods of accounting for [exploitation costs](https://asc.understandingaccounting.org/glossary/e/#exploitation-costs "All direct costs (including marketing, advertising, publicity, promotion, and other distribution expenses) incurred in connection with the distribution of a film.").