Songwriters advance

revenue or capital

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A newly set up music publishing company has paid out various advances to songwriters and I am checking on the accounting treatment. I have advised that they should all be taken as revenue expenditure and not treated as an asset, they are recoupable but not repayable. Is this in line with IFRS FRS treatment?

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By Accountant A
06th Aug 2018 12:50

Were any legal agreements put in place when the company was handing out the cash?

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By carnmores
06th Aug 2018 13:05

yes they are recoupable but not repayable

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By WhichTyler
06th Aug 2018 13:06

The 'recoupable but not repayable' aspect usually makes them income int he recipients hand's but could still be intangible asset in the publisher's. Big question is whether the value of anticipated future economic benefits can be reliably estimated?

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By carnmores
06th Aug 2018 13:17

thanks , that is what I thought , fortunately 2 writers recouped in the year and there is only one other and he hasn't and isn't likely to for a while so I have expensed

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