PracticeAuditFilm and TV accounting needs major overhaul

Film and TV accounting needs major overhaul

The UK film and television industry needs to overhaul the way in which its financial performance is measured, according to Grant Thornton.

Link: TV giants blamed for end to film tax breaks

A new report from the mid-tier firm claims that accounting by distributors and production companies can be poorly disclosed and varies across the industry. It also questions how relevant conventional reporting is to those who exploit intellectual property rights.

Co-author of the report entitled What happened next?, Terry Back, said: ‘Since last year’s reports there have been a number of major corporate failures in the media sector and elsewhere. In many of these cases, the collapse came as a complete surprise to investors and it begs the question; could these events have been foreseen with different accounting disclosures by the companies involved?’

Back added that investors still do not understand the way that profits and losses are recognised in the film and television industry and that current accounting standards, which apply to the recognition of intangible assets, do not address film and television rights adequately enough.

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