Question :

Instructions: You have been asked to comment on the accounting treatment for various independent transactions by citing the appropriate section of the FASB ASC. Your first paragraph(s) should be the citation from the FASB ASC supporting your decision. Your second paragraph (or more) should be in your own words explaining how the ASC applies to your decision - be specific. Show support for your choice in your second paragraph. You can include things like why we do things in the manner prescribed by the FASB ASC, alternative accounting treatment, etc. This is where you show your understanding of accounting.

For all of the questions consider that you are a for-profit entity. Limit every question to one citation from the ASC. If you consider that there is more than one citation from the ASC that is appropriate, select the one that you believe is the "best." You cannot use the Master Glossary as a citation. Be sure to "cut and paste" the FASB ASC citation - do not retype it - and explain the citation number as presented in the example below. Only add information from the ASC relevant to your responses - do not "cut and paste" the complete citation if it is not relevant.

FASB ASC CITATION:

Record Master Costs

928-340Currently Viewing:

928 Entertainment-Music

340 Other Assets and Deferred Costs

25 Recognition

General

> Licensor Accounting

>> Record Master Costs

The portion of the record master cost borne by the record company shall be reported as an asset if the past performance and current popularity of the artist provides a sound basis for estimating that the cost will be recovered from future sales.