probable sacrifice of assets

Liabilities1

1. 405-926Entertainment—Films405 Liabilities

   ASC 405-926 governs how film production and distribution entities accrue participation costs — amounts owed to third parties such as actors and writers — and costs of insignificant post-release changes to a film. Participation costs are accrued using the individual-film-forecast-computation method (current period actual revenue over estimated remaining unrecognized ultimate revenue at the beginning of the fiscal year), but only when it is probable an entity will sacrifice assets to settle the obligation, and never for less than amounts currently payable. If the recorded participation liability exceeds estimated unpaid ultimate participation costs, the excess reduces unamortized film costs first, then goes to income.