Accounting for motion pictures: an examination of the quality of two accounting standards

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Title: Accounting for motion pictures: an examination of the quality of two accounting standards
Creators: Wiece, Deborah Lynn
Advisor: Murdock, Richard
Issue Date: 2000
Abstract: FAS 53, Financial Reporting by Producers and Distributors of Motion Picture Films, was issued in 1981 and set the requirements for external financial reporting in the motion picture industry. However, due primarily to changes in the industry since then, there have been many criticisms regarding the statement. In an attempt to address these criticisms, a proposed Statement of Position (PSOP) was written. This PSOP addresses some of the more controversial accounting methods allowed under FAS 53, and it requires more conservative income recognition policies. The goal of this distinction project was to determine which of these two accounting standards-FAS 53 or the PSOP-is of higher quality, with my hypothesis being that the PSOP was a higher-quality standard. To determine the quality of a standard, one can look at the characteristics, primarily the relevance and reliability, of the information it provides. In order to assess the quality of the information, I asked users of financial statements for their opinions through the use of a survey. 150 surveys were sent out to entertainment industry professionals, public accountants, and university accounting professors, and a response rate of 11.33% was achieved. Despite the low response rate, respondents indicated a preference for the PSOP in most areas. Therefore, although the PSOP does not address all of the criticisms of FAS 53, it does significantly improve accounting for motion pictures, and thus it is the standard of higher quality.
Series/Report no.: The Ohio State University. College of Business Honors Theses; 2000
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