broadcaster licensee

This Subtopic tells broadcasters how to classify cash paid for program license rights in the statement of cash flows. Under 230-920-45-1, cash outflows to obtain rights under a license agreement for program material are operating activities, and the amortization of the capitalized license costs is included in the reconciliation of net income to net cash flows from operating activities.

This Subtopic tells a broadcaster (licensee) how to account for rights acquired under a license agreement for program material: when to recognize the asset and related liability, at what amounts to record them, and how to amortize and test them for impairment. The core rule is that the license is treated as a purchase of a right or group of rights, recognized when the license period begins and three cost/acceptance/availability conditions are met, then amortized based on estimated future showings and carried at the lower of unamortized cost or fair value. It also governs accounting for terminated network affiliation agreements.