06 May 2008
Suppose that there's a tv channel which buys the right to telecast a movie say twice in a year for three years and pays the entire amount in the first yer say Rs. 3,00,000....
Will this entire amount be allowed in the year of payment if the tv channel follows accrual system of accounting???
Kindly support will relevant sections & case studies...
07 May 2008
In my opinion, if this agreement is for certain no. of telecast with no time limit, proportionate expenses should be booked every time when movie is telecasted. If there is time limit also like twice telecast within 1 year, book proportionate expenditure every time when movie is telecasted and if and movie is telecasted only once till the end of period, rest expenditure should be booked on expiry of period.
If agreement is for certain period with unlimited telecast, proportional expenditure should be booked in every accounting period under agreement period.
CAclubindia
