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Making sense of a complex world
Content development and cost capitalisation by media companies
This paper explores the critical considerations relating to the classification, capitalisation and amortisation of content development spent under the applicable IFRS standards - IAS 2 Inventories and IAS 38 Intangible Assets, focusing on the television production, educational publishing and video game sectors.
PwC’s 16th Annual Global CEO Survey highlighted that 38% of CEOs in the Entertainment & Media (E&M) sector see new product/ service/ content development as key to growing their business over the coming years. However, the accounting for spending on internal development presents challenges.
Companies that 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.