minimum guarantee

This Subtopic tells music-industry entities when to expense artist royalties, record master production costs, advance minimum guarantees paid by licensees, and other license fees. The core rule is that artist royalties (adjusted for anticipated returns) are charged to expense in the period the record sale occurs, advances are expensed as royalties are subsequently earned, and any advance or minimum guarantee that appears unrecoverable is expensed when the loss becomes evident (720-928-25-1, 720-928-25-3).

ASC 928-10 is the overview and scope subtopic for accounting by entities in the record and music industry. It flags the topics covered elsewhere in ASC 928 — licensing of music copyrights and record masters, artist compensation costs (including royalties paid to recording artists), costs of producing record masters, and licensees' accounting for fees and minimum guarantees. The guidance is incremental industry-specific guidance only; entities in scope must still follow all other applicable GAAP.