Making sense of a complex world: Broadcast television - acquired programming rights

Building an accounting framework for acquired programming rights
The third in the series of guides from PwC's Media Industry Accounting Group, this paper explores the critical considerations relating to the recognition, presentation, amortisation and impairment of acquired programming rights for broadcast television.

A key to success for many in the television broadcast industry, along with developing their own content, is acquiring rights to programmes for exploitation. Many major broadcasters which report under IFRS explicitly highlight acquiring programming rights as a key driver of future revenue growth.

However, as broadcasting evolves in response to digital transformation and market fragmentation, accounting procedures for acquired content pose new challenges for media companies. Neither IAS 2 nor IAS 38 is specific to the television industry nor do they offer relevant interpretive guidance. The significant increase from digital transformation in the number of cable/satellite channels, the variety of funding models and the advent of multi-platform programming rights have added complexity to key areas of judgement such as the amortisation method and assessment of impairment. Furthermore, the increasingly global nature of television broadcasting introduces foreign exchange complexity.

Companies which are adept at navigating the intricate accounting and reporting practices can tell their story in a clear and compelling manner, building public trust in their performance with stakeholders such as investors, analysts, employees, suppliers, advertisers and viewers.

What the paper covers:

  • The critical considerations relating to the recognition, presentation, amortisation and impairment of acquired programming rights under the applicable IFRS standards IAS 2 Inventories and IAS 38 Intangible Assets.
  • A specific focus on sports rights, reflecting their ever-increasing value and importance – particularly topical in 2012 as an Olympic Games year.
  • Some new accounting challenges arising from multi-platform programming rights across television, desktop computer, tablet and smartphone.

Whilst the answer for complicated real life transactions will, as always, depend on the specific facts, the information in this paper can be used as a framework when considering how to recognise, classify and measure your acquired programming rights. Download the paper now to find out more.