# ASC 720-928-25: Other Expenses — Entertainment—Music — 25 Recognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/720/928/#25-recognition)

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): 2026-09-10T01:10:30.076Z to 2026-09-10T01:10:30.076Z

Record version: sha256:f964e82b5185a96451c5253654d58b00d9e6ac828580b96fc27c82a20e55d52b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 720-928-25: 25 Recognition

[Read section](https://asc.understandingaccounting.org/asc/720/928/#25-recognition)

SEC content: no

#### Licensor Accounting

##### [720-928-25-1](https://asc.understandingaccounting.org/asc/720/928/#720-928-25-1)

Pending content: no

Source downloaded (UTC): 2026-09-10T01:10:30.076Z to 2026-09-10T01:10:30.076Z

Record version: sha256:5455f871932134a622386a312d0fe10194e6ff4834d38231127d154e377ac04e

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


The amount of [royalties](https://asc.understandingaccounting.org/glossary/r/#royalties "Amounts paid to record producers, songwriters, or other artists for their participation in making records and to music publishers for their copyright interest in music. Amounts for artists are determined by the terms of personal service contracts negotiated between the artists and record entities and usually are determined based upon a percentage of sales activity and license fee income, adjusted for estimated sales returns. Royalties for publishing are based on the copyright or other applicable laws, but the requirements of the law may be modified by licenses issued by the publishers.") earned by artists, as adjusted for anticipated returns, shall be charged to expense of the period in which the sale of the record takes place. [Advance royalties](https://asc.understandingaccounting.org/glossary/a/#advance-royalty "An amount paid to music publishers, record producers, songwriters, or other artists in advance of their earning royalties from record or music sales. Such an amount is based on contractual terms and is generally nonrefundable.") shall be charged to expense as subsequent royalties are earned by the artist. Any portion of such advances that subsequently appear not to be fully recoverable from future royalties to be earned by the artist shall be charged to expense during the period in which the loss becomes evident.

##### [720-928-25-2](https://asc.understandingaccounting.org/asc/720/928/#720-928-25-2)

Pending content: no

Source downloaded (UTC): 2026-09-10T01:10:30.076Z to 2026-09-10T01:10:30.076Z

Record version: sha256:7dbbd695e8fe0baf1d4e5af7f0d7963efa561b2ccd20a6b84b5a86c62a8addd6

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


The portion of the [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.") cost borne by the record company not reported as an asset in accordance with paragraph [928-340-25-2](https://asc.understandingaccounting.org/asc/340/928/#340-928-25-2) shall be charged to expense.

#### Licensee Accounting

##### [720-928-25-3](https://asc.understandingaccounting.org/asc/720/928/#720-928-25-3)

Pending content: no

Source downloaded (UTC): 2026-09-10T01:10:30.076Z to 2026-09-10T01:10:30.076Z

Record version: sha256:a0202aac5dbadfa103ddf79cb294add8a3f1f398874c012813c14357e27f58cb

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


As described in paragraph [928-340-35-3](https://asc.understandingaccounting.org/asc/340/928/#340-928-35-3), if all or a portion of a [minimum guarantee](https://asc.understandingaccounting.org/glossary/m/#minimum-guarantee "An amount paid in advance by a licensee to a licensor for the right to sell or distribute records or music.") paid in advance by a licensee subsequently appears not to be recoverable through future use of the rights obtained under the license, the nonrecoverable portion shall be charged to expense.