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| | The CPA Journal |
 | | Allocations to a film or films not yet produced or completed should be based on the amounts refundable to the customer if the entity does not ultimately complete and deliver the films. |
 | | This technique, illustrated in Exhibit 1, ensures that, given constant estimates, film costs are amortized and participation costs are accrued in a manner that, over the ultimate period, generates a constant rate of periodic profit before exploitation costs (marketing, advertising, publicity, promotion, and other distribution expenses, manufacturing costs, and other period costs). |
 | | If a film is released around the entity’s balance sheet date and evidence exists that a write-down of the film’s unamortized costs is required, then, if the entity has not issued its financial statements, it should adjust them for the effect of any changes in estimates resulting from the use of subsequent evidence. |
| www.nysscpa.org /cpajournal/2001/1000/features/f103201.htm (3615 words) |
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