# ASC 926-20-35: Entertainment—Films — Other Assets—Film Costs — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/926/20/#35-subsequent-measurement) 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): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:2335f7cdcf82e1ea47a196ef3dafc6d92569038f8fbd835c9eb0be5518e19c0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 926-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/926/20/#35-subsequent-measurement) SEC content: no #### Film Costs Amortization ##### [926-20-35-1](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:b8ec6a3808a4c3928c14a0f2572240ce062741ebdc6727df16296df792688d94 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a film that is predominantly monetized on its own, an entity shall amortize [film costs](https://asc.understandingaccounting.org/glossary/f/#film-costs "Film costs include all direct negative costs incurred in the physical production of a film, as well as allocations of production overhead and capitalized interest in accordance with Topic 835. Examples of direct negative costs include costs of story and scenario; compensation of cast, directors, producers, extras, and miscellaneous staff; costs of set construction and operations, wardrobe, and accessories; costs of sound synchronization; rental facilities on location; and postproduction costs such as music, special effects, and editing.") using the individual-film-forecast-computation method, which amortizes such costs in the same ratio that current period actual revenue (numerator) bears to estimated remaining unrecognized ultimate revenue as of the beginning of the current fiscal year (denominator). In this way, in the absence of changes in estimates, film costs are amortized in a manner that yields a constant rate of profit over the ultimate period, as described in paragraph [926-20-35-5(a)](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-5), for each film before [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."), manufacturing costs, and other period expenses. Unamortized film costs as of the beginning of the current fiscal year are multiplied by the individual-film-forecast-computation method fraction. That is, an entity shall begin amortization of capitalized film costs when a film is released and it begins to recognize revenue from that film. For more information, see Example 1 (paragraph [926-20-55-1](https://asc.understandingaccounting.org/asc/926/20/#926-20-55-1)). For a film that is predominantly monetized on its own but also monetized with other films and/or license agreements, an entity shall make a reasonably reliable estimate of the value attributable to the film's exploitation while monetized with other films and/or license agreements for inclusion in its individual-film-forecast computation. For purposes of applying the individual-film-forecast-computation method to episodic television series, multiple seasons of an episodic television series are considered to be a single product. For more information, see Example 4 (paragraph [926-20-55-12](https://asc.understandingaccounting.org/asc/926/20/#926-20-55-12)). ##### [926-20-35-2](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:799edbbd0a16896099be8ec688f2d7c594892841305128aefc4199042ca08e4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a film that is in a [film group](https://asc.understandingaccounting.org/glossary/f/#film-group "The unit of account used for impairment testing for a film or a license agreement for program material when the film or license agreement is expected to be predominantly monetized with other films and/or license agreements instead of being predominantly monetized on its own. A film group represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other films and/or license agreements."), an entity shall make a reasonably reliable estimate of the portion of unamortized film costs that is representative of the use of the film. An entity shall expense such amounts as it exhibits or exploits the film. (For example, an entity with a direct-to-consumer streaming platform that does not accept advertising on its platform may produce a film and only show it on its platform. In this example, the entity receives subscription fees from third parties that are not directly related to a particular film.) ##### [926-20-35-3](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:422a26623f250d9af01bed93c2beaa3c64389abea4bdc89f9b9ce50692477e2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a result of uncertainties in the estimating process, actual results may vary from estimates. An entity shall review and revise estimates of ultimate revenue as of each reporting date to reflect the most current available information. If estimates are revised, an entity shall determine a new denominator that includes only the ultimate revenue from the beginning of the fiscal year of change (that is, ultimate revenue changes are treated prospectively as of the beginning of the fiscal year of change). The numerator (revenue for the current fiscal year) is unaffected by the change. An entity shall apply the revised fraction to the net carrying amount of unamortized film costs as of the beginning of the fiscal year, and the difference between expenses determined using the new estimates and any amounts previously expensed during that fiscal year shall be charged or credited to the income statement in the period (for example, the quarter) during which the estimates are revised. For more information, see Example 2 (paragraph [926-20-55-5](https://asc.understandingaccounting.org/asc/926/20/#926-20-55-5)). ##### [926-20-35-3A](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-3A) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:83bab545952c60481d0dba59e16dd00a9746b95dbb1459aa0b20f25ebce13316 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall review and revise estimates of the remaining use of the film for film costs amortized in accordance with paragraph [926-20-35-2](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-2) as of each reporting date to reflect the most current available information. Changes to estimates of the remaining use of a film shall be accounted for prospectively. #### Predominant Monetization Strategy ##### [926-20-35-3B](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-3B) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:8da674273debc7dd15ecc7036745f969a39bc3188bb1b88ecc707b393ed62ed4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall determine whether a film is part of a film group when capitalization of film costs begins by assessing whether it is expected to be predominantly monetized on its own or predominantly monetized with other films and/or license agreements. ##### [926-20-35-3C](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-3C) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:ab910e4c910aeb1a0c753f59b90a42a0ea201a4687abb54ccd15555699e16931 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If there is a significant change to the monetization strategy of a film compared with the monetization strategy determined when capitalization of film costs began, an entity shall reassess the predominant monetization strategy for that film. The reassessment of the predominant monetization strategy shall include an assessment of the monetization strategy throughout the entire life of the film rather than an assessment from the time of the significant change in monetization strategy. Two examples of a significant change to the monetization strategy of a film are adding a previously unplanned significant distribution channel and forgoing a previously planned significant distribution channel. For purposes of determining whether there is a significant change to the monetization strategy, results of the monetization strategy that are different from the expected results shall not be considered a significant change to the monetization strategy. #### Ultimate Revenue ##### [926-20-35-4](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:2b0b1fb8ba24914c7b18d6506f35f33c4cd11a7c676bcf1cb8041949a7687b28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ultimate revenue to be included in the denominator of the individual-film-forecast-computation method fraction shall include estimates of revenue that is expected to be recognized by an entity from the exploitation, exhibition, and sale of a film in all markets and territories, subject to the limitations set forth in paragraph [926-20-35-5](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-5). ##### [926-20-35-5](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:6fa1e0d8615175274651a1d1166077e1594a719a22558f570d2b90234837dc86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ultimate revenue shall be limited by the following: 1. a For [films](https://asc.understandingaccounting.org/glossary/f/#films "Feature films, television specials, television series, or similar products (including animated films and television programming) that are sold, licensed, or exhibited, whether produced on film, video tape, digital, or other video recording format.") other than episodic television series, ultimate revenue shall include estimates over a period not to exceed 10 years following the date of the film's initial release. For episodic television series, ultimate revenue shall include estimates of revenue over a period not to exceed 10 years from the date of delivery of the first episode or, if still in production, 5 years from the date of delivery of the most recent episode, if later. For previously released films acquired as part of a film library, ultimate revenue shall include estimates over a period not to exceed 20 years from the date of acquisition. For the purposes of this Topic, an entity shall categorize as part of a film library only those individual films whose initial release dates were at least three years prior to the acquisition date. 2. b Ultimate revenue shall include estimates of revenue from a [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.") or [territory](https://asc.understandingaccounting.org/glossary/t/#territory "A geographic area in which a film is exploited. In most cases, a territory consists of a country. However, in certain instances, a territory may be defined as countries with a common language.") only if persuasive evidence exists that such revenue will occur, or if an entity can demonstrate a history of recognizing such revenue in that market or territory. Ultimate revenue shall include estimates of revenue from newly developing territories only if an existing arrangement provides persuasive evidence that an entity will realize such amounts. 3. c Ultimate revenue shall include estimates of revenue from licensing arrangements with third parties to market film-related products only if persuasive evidence exists that such revenue from that arrangement will occur for that particular film (such as a signed contract to receive a [nonrefundable minimum guarantee](https://asc.understandingaccounting.org/glossary/n/#nonrefundable-minimum-guarantee "Amount paid or payable by a customer in a variable fee arrangement that guarantees an entity a minimum fee on that arrangement. Such a guarantee applies to an amount paid by a customer immediately and an amount that the customer has a legally binding commitment to pay over a license period.") or a nonrefundable advance) or if an entity can demonstrate a history of recognizing such revenue from that form of arrangement. 4. d Ultimate revenue shall include estimates of the portion of the wholesale or retail revenue from an entity's sale of peripheral items (such as toys and apparel) that is attributable to the exploitation of themes, characters, or other contents related to a particular film only if the entity can demonstrate a history of recognizing such revenue from that form of exploitation in similar kinds of films. For example, an entity may conclude that the portion of revenue from the sale of peripheral items that it shall include in ultimate revenue is an estimate of what would be recognized by the entity if rights for such form of exploitation had been granted under licensing arrangements with third parties. Ultimate revenue shall not, however, include estimates of the entire amount of wholesale or retail revenue from an entity's sale of peripheral items. 5. e Ultimate revenue shall not include estimates of revenue from unproven or undeveloped technologies. 6. f Ultimate revenue shall not include estimates of wholesale promotion or advertising reimbursements to be received from third parties. Such amounts shall be offset against exploitation costs. 7. g Ultimate revenue shall not include estimates of amounts related to the sale of film rights for periods after those identified in (a). ##### [926-20-35-6](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:b4fbefeef068b423e68ae60f46e2f561c5eabb7ad4554e8079f7bddb84efa0a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall not discount ultimate revenue to its present value except when a significant financing component is identified (see paragraphs [606-10-32-15 through 32-20](https://asc.understandingaccounting.org/asc/606/10/#606-10-32-15) ) in a [contract](https://asc.understandingaccounting.org/glossary/c/#contract "An agreement between two or more parties that creates enforceable rights and obligations.") in which an entity promises to grant a license within the scope of Topic 606. ##### [926-20-35-7](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:a0de7249fb47464fa0ca5888ad0345aad7d8376fa43ce137aba543bda2eac6a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All foreign currency estimates of future revenues shall be based on current [spot rates](https://asc.understandingaccounting.org/glossary/s/#spot-rate "The exchange rate for immediate delivery of currencies exchanged."). ##### [926-20-35-8](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:51a2247f077d735aba3e50717e89559c165bb708dc2bbb1325643edba0d77bd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ultimate revenue shall not include amounts representing projections for future inflation. ##### [926-20-35-9](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:e850eb1285308dfa1ff861a9261ebfacbdc3b87341b1ecff8cffcf784f3aa371 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2019-02](https://asc.understandingaccounting.org/updates/asu-2019-02/). ##### [926-20-35-10](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:a2013615c212402e043e2ad626807f75bce562ba68195f57ea5e063739998eb8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2019-02](https://asc.understandingaccounting.org/updates/asu-2019-02/). ##### [926-20-35-11](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:fde256ffe13b412f9ebc9162746e00fa888e93bd623377d7d5ef881c6f88c56b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2019-02](https://asc.understandingaccounting.org/updates/asu-2019-02/). #### Impairment ##### [926-20-35-12](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:c48ed1d859df19172080df62489042f8e00d81accf0a9fed30e2d4a59ded7f48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unamortized film costs shall be tested for impairment whenever events or changes in circumstances indicate that the fair value of a film predominantly monetized on its own (see paragraph [926-20-35-12A](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-12A)) or a [film group](https://asc.understandingaccounting.org/glossary/f/#film-group "The unit of account used for impairment testing for a film or a license agreement for program material when the film or license agreement is expected to be predominantly monetized with other films and/or license agreements instead of being predominantly monetized on its own. A film group represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other films and/or license agreements.") (see paragraph [926-20-35-12B](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-12B)) may be less than its unamortized costs. ##### [926-20-35-12A](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-12A) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:2c2f178a0de3c328235f55e03fe3f7cb6121fb4c33297404ea7cf63ecb952d67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of events or changes in circumstances that indicate that an entity shall assess whether the fair value of a film (whether completed or not) is less than its unamortized film costs: 1. a An adverse change in the expected performance of a film prior to release 2. b Actual costs substantially in excess of budgeted costs 3. c Substantial delays in completion or release schedules 4. d Changes in release plans, such as a reduction in the initial release pattern 5. e Insufficient funding or resources to complete the film and to market it effectively 6. f Actual performance subsequent to release failing to meet expectations set before release due to factors such as the following: 1. 1 A significant adverse change in technological, regulatory, legal, economic, or social factors that could affect the public's perception of a film or the availability of a film for future showings 2. 2 A significant decrease in the amount of ultimate revenue expected to be recognized. 7. g A change in the predominant monetization strategy of a film resulting in the film being predominantly monetized with other films and/or license agreements. ##### [926-20-35-12B](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-12B) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:6ce94fcf91672348cfdc1e8284cede6dc7528f8d25ff04947ba62a842174c501 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following are examples of events or changes in circumstances for a film group that indicate that an entity shall assess whether the fair value of a film group is less than its unamortized film costs: 1. a A significant adverse change in technological, regulatory, legal, economic, or social factors that could affect the fair value of the film group 2. b A significant decrease in the number of subscribers or forecasted subscribers, or the loss of a major distributor 3. c A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection of continuing losses associated with the use or exploitation of a film group. ##### [926-20-35-13](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:76adad3baba7999184727edf129bdbca888272e71582d6eb7fd66761ce463de7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an event or change in circumstance indicates that an entity shall assess whether the fair value of a film (or film group) is less than its unamortized film costs, the entity shall determine the fair value of the film (or film group) (the determination of which is affected by estimated future exploitation costs still to be incurred) and write off to the income statement the amount by which the unamortized capitalized costs exceed the film's (or film group's) fair value. Exploitation costs incurred after such a write-off shall be accounted for in accordance with the provisions of paragraphs [926-720-25-2 through 25-3](https://asc.understandingaccounting.org/asc/720/926/#720-926-25-2) . An entity shall treat the reduced amount of capitalized film costs that have been written down to fair value (subject to paragraph [926-20-35-19](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-19) for films in a film group) at the close of an annual fiscal period as the cost for subsequent accounting purposes, and an entity shall not subsequently restore any amounts previously written off. ##### [926-20-35-14](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:dbcdbc64a557e1640e122e524fc0e87893b828525c7a759fddd2e319262c9e80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A discounted cash flow model may be used to estimate fair value. If applicable, future cash flows based on the terms of any existing contractual arrangements, including cash flows over existing license periods without consideration of the limitations set forth in paragraph [926-20-35-5](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-5), shall be included. ##### [926-20-35-15](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:8a91baa82fbb81ff8e203a8006b06a3fa152c1377ccf30c7a67681559929b8ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall consider the following factors, among others, in estimating future cash inflows for a film: 1. a If previously released, the film's performance in prior markets 2. b The public's perception of the film's story, cast, director, or [producer](https://asc.understandingaccounting.org/glossary/p/#producer "An individual or an entity that produces and has a financial interest in films for exhibition in movie theaters, on television, or elsewhere.") 3. c Historical results of similar films 4. d Historical results of the cast, director, or producer on prior films 5. e Running time of the film. In determining a film's (or film group's) fair value, it is also necessary to consider those cash outflows necessary to generate the film's (or film group's) cash inflows. Therefore, an entity shall incorporate, if applicable, its estimates of future costs to complete a film, future exploitation and [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."), or other necessary cash outflows in its determination of fair value when using a discounted cash flow model. ##### [926-20-35-16](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:76d3950eccc84fd15cf8d4bd0d32721ebecba6a1d61b0db33090e3eb78717273 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When using the traditional discounted cash flow approach to estimate the fair value of a film (or film group), the relevant future cash inflows and outflows shall represent the entity's estimate of the most likely cash flows. When determining the fair value of a film (or film group) using the expected cash flow approach, all possible relevant future cash inflows and outflows shall be probability-weighted by period and the estimated mean or average by period shall be used. ##### [926-20-35-17](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:225aa494bc4aa2fb8c17eb588fd95b3716f7dd17710f93f0f40f3229ed91caaf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When determining the fair value of a film (or film group) using a traditional discounted cash flow approach, the discount rate(s) shall not be an entity's incremental borrowing rate(s), liability settlement rate(s), or weighted average cost of capital because those rates typically do not reflect the risks associated with a particular film (or film group). The discount rate(s) shall consider the time value of money and the expectations about possible variations in the amount or timing of the most likely cash flows and an element to reflect the price market participants would seek for bearing the uncertainty inherent in such an asset, as well as other factors, sometimes unidentifiable, including illiquidity and market imperfections. When determining the fair value of a film (or film group) using the expected cash flow approach, the discount rate(s) also would consider the time value of money. Because they are reflected in the expected cash flows, there would be no adjustment for possible variations in the amounts or timing of those cash flows. If not reflected in risk-adjusted expected cash flows, an additional element to reflect the price market participants would seek for bearing the uncertainty inherent in such an asset as well as other factors, sometimes unidentifiable, including illiquidity and market imperfections, shall be added to the discount rate(s). ##### [926-20-35-18](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:f81a34fd8a088b9ff73bb0324d28802edd0c60797901cbaca0d3bd961e92df40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2012-07](https://asc.understandingaccounting.org/updates/asu-2012-07/). ##### [926-20-35-19](https://asc.understandingaccounting.org/asc/926/20/#926-20-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T02:11:51.751Z to 2026-09-10T02:11:51.751Z Record version: sha256:46eeb6873688b2c5fcfde174ae516ea7c7a65aa96659c3f0590c36779d79f4e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An impairment loss attributable to a film group shall reduce only the carrying amounts of a film or license agreement included in that film group. The loss shall be allocated to the films and license agreements within the film group on a pro rata basis using the relative carrying amounts of those assets. However, if an entity can estimate the fair value of individual films and license agreements in the film group without undue cost and effort, it shall not reduce the carrying amount of those films below their fair value.