# ASC 926-20-40: Entertainment—Films — Other Assets—Film Costs — 40 Derecognition

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/926/20/#40-derecognition)

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## ASC 926-20-40: 40 Derecognition

[Read section](https://asc.understandingaccounting.org/asc/926/20/#40-derecognition)

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#### Film Properties

##### [926-20-40-1](https://asc.understandingaccounting.org/asc/926/20/#926-20-40-1)

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An entity shall periodically review properties in development to determine whether they will ultimately be used in the production of a film. It shall be presumed that an entity will dispose of a property (whether by sale or abandonment) if it has not been [set for production](https://asc.understandingaccounting.org/glossary/s/#set-for-production "This means that management, with the relevant authority, implicitly or explicitly authorizes and commits to funding the production of a film; active preproduction has begun; and the start of principal photography is expected to begin within six months.") within three years from the time of the first capitalized transaction.

##### [926-20-40-2](https://asc.understandingaccounting.org/asc/926/20/#926-20-40-2)

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If an entity determines that a film property will not be used (disposed of), it shall recognize any loss by a charge to the income statement. Amounts written off shall not be subsequently reestablished as assets.

##### [926-20-40-3](https://asc.understandingaccounting.org/asc/926/20/#926-20-40-3)

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An entity shall measure the loss as the amount by which the carrying amount of the project exceeds its fair value. Unless management, having the authority to approve the action, has committed to a plan to sell such property, the rebuttable presumption is that the entity will abandon the property and, as such, its fair value shall be zero.

##### [926-20-40-4](https://asc.understandingaccounting.org/asc/926/20/#926-20-40-4)

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[Paragraph superseded by Accounting Standards Update No. 2019-02](https://asc.understandingaccounting.org/updates/asu-2019-02/).

##### [926-20-40-5](https://asc.understandingaccounting.org/asc/926/20/#926-20-40-5)

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An entity shall write off remaining unamortized film costs when a film is substantively abandoned.