8 pages
Word Count
2807 words
Course Code


November 23, 2020
Joint revenue recognition
project — key issues in
media and entertainment
July 2012
Applying IFRS in media
and entertainment
Overview 1
Significant feedback received from the media and
entertainment industry respondents 1
Satisfaction of performance obligations 1
Determine the transaction price 2
Onerous performance obligations 2
Contract acquisition costs 3
Disclosure 3
Transition 3
Next steps 3
Appendix: Re-deliberation plan 4
What you need to know
The IASB and the FASB have completed their evaluation of feedback
received via comment letters and outreach efforts.
While respondents in the media and entertainment industry
generally support the Boards’ progress on the 2011 proposal, many
still have significant concerns about certain aspects of the proposal,
including when revenue would be recognised for licence agreements,
non-cash consideration, onerous performance obligations, interim
and annual disclosure requirements and transition.
Media and entertainment entities also requested additional
application guidance on other aspects of the proposal.
Re-deliberations will begin in July 2012 and are expected to
continue through to December 2012.
The International Accounting Standards Board (IASB) and the
Financial Accounting Standards Board (FASB) (collectively, the
Boards) jointly issued an exposure draft (ED) Revenue from
Contracts with Customers in November 2011 that would
supersede virtually all existing revenue guidance in IFRS and
US GAAP. The ED specifies the accounting for all revenue arising
from contracts to provide goods or services to customers (except
for contracts that are in the scope of another standard, such as
leases). The comment period on the Boards’ proposal ended in
March 2012.
Respondents in the media and entertainment industry are
especially concerned that the proposal would require them to
recognise intellectual property (IP) licence revenue up-front rather
than over time. In addition, under the new model, a single
arrangement to license content could end up being accounted for
as multiple transactions for revenue recognition purposes.
Significant feedback
received from the media
and entertainment industry
This publication summarises the more significant themes of the
feedback received from the media and entertainment industry,
as well as the Boards’ proposed next steps.
Satisfaction of performance obligations
The proposal would require entities to determine whether a
performance obligation is satisfied over time based on certain
criteria. However, for entities that grant a customer a licence to
use IP, the proposal states that the performance obligation would
be satisfied when the customer obtains control of the rights,
which generally would be at a point in time. Most respondents