This company was transferred to the archive: financial data is no longer updated!

Microsoft Excel LibreOffice Calc

Twenty-First Century Fox Inc. (NASDAQ:FOX)

Analysis of Inventory

Advanced level

Accounting Policy on Inventory

Filmed Entertainment Costs

In accordance with ASC 926, "Entertainment—Films" ("ASC 926"), Filmed Entertainment costs include capitalized production costs, overhead and capitalized interest costs, net of any amounts received from outside investors. These costs, as well as participations and talent residuals, are recognized as operating expenses for each individual motion picture or television series based on the ratio that the current year’s gross revenues for such film or series bear to management’s estimate of its total remaining ultimate gross revenues. Management bases its estimates of ultimate revenue for each motion picture on the historical performance of similar motion pictures, incorporating factors such as the past box office record of the lead actors and actresses, the genre of the motion picture, pre-release market research and the expected number of theaters in which the motion picture will be released. Management updates such estimates based on information available on the actual results of each motion picture through its life cycle. Television production costs incurred in excess of the amount of revenue contracted for each episode in the initial market are expensed as incurred on an episode-by-episode basis. Estimates for initial syndication revenue are not included in the estimated lifetime revenues of network series until such sales are probable. Television production costs incurred subsequent to the establishment of secondary markets are capitalized and amortized. Marketing costs are charged as operating expenses as incurred. Development costs for projects not produced are written-off at the earlier of the time the decision is made not to develop the story or after three years.

Filmed Entertainment costs are stated at the lower of unamortized cost or estimated fair value on an individual motion picture or television series basis. Revenue forecasts for both motion pictures and television series are continually reviewed by management and revised when warranted by changing conditions. When estimates of total revenues and other events or changes in circumstances indicate that a motion picture or television series has a fair value that is less than its unamortized cost, a loss is recognized currently for the amount by which the unamortized cost exceeds the film or television series’ fair value. Twenty-First Century Fox receives tax credits on qualifying motion picture and television productions which are offset against Filmed Entertainment costs. Twenty-First Century Fox records these outstanding tax credits in Other non-current assets in the Consolidated Balance Sheets.

Programming Rights

In accordance with ASC 920, "Entertainment—Broadcasters," costs incurred in acquiring program rights or producing programs for the Cable Network Programming and Television segments, including advances, are capitalized and amortized over the license period or projected useful life of the programming. Program rights and the related liabilities are recorded at the gross amount of the liabilities when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. Television broadcast network entertainment programming and cable network entertainment programming, which includes acquired series, series produced in-house, movies and other programs, are amortized primarily on an accelerated basis.

Twenty-First Century Fox has single and multi-year contracts for broadcast rights of programs and sporting events. Twenty-First Century Fox evaluates the recoverability of the unamortized costs associated therewith, using total estimated advertising and other revenues attributable to the program material and considering Twenty-First Century Fox’s expectations of the programming usefulness of the program rights. The recoverability of certain sports rights contracts for content broadcast on FOX and the national sports channels is assessed on an aggregate basis. Where an evaluation indicates that these multi-year contracts will result in an asset that is not recoverable, amortization of rights is accelerated. The costs of multi-year national sports contracts at FOX and the national sports channels are primarily amortized based on the ratio of each current period’s attributable revenue for each contract to the estimated total remaining attributable revenue for each contract. Estimates can change and, accordingly, are reviewed periodically and amortization is adjusted as necessary. Such changes in the future could be material.

The costs of local and regional sports contracts for a specified number of events are amortized on an event-by-event basis while costs for local and regional sports contracts for a specified season are amortized over the season on a straight-line basis.

Source: 10-K (filing date: 2018-08-13).

Inventory Disclosure

Twenty-First Century Fox Inc., balance sheet: inventory

US$ in millions

Microsoft Excel LibreOffice Calc
Jun 30, 2018 Jun 30, 2017 Jun 30, 2016 Jun 30, 2015 Jun 30, 2014 Jun 30, 2013
Sports programming rights 3,676  3,201  3,263  —  —  — 
Entertainment programming rights 3,219  3,168  3,017  —  —  — 
Other Programming rights —  —  —  5,496  5,812  4,996 
Programming rights 6,895  6,369  6,280  5,496  5,812  4,996 
DVDs, Blu-rays and other merchandise 44  64  79  67  81  69 
Released, less accumulated amortization 1,249  1,112  1,505  1,094  1,025  806 
Completed, not released 98  398  64  27  317  10 
In production 1,556  1,094  825  1,170  819  958 
In development or preproduction 221  295  196  185  151  193 
Films 3,124  2,899  2,590  2,476  2,312  1,967 
Released, less accumulated amortization 743  838  1,067  868  862  696 
In production, development or preproduction 381  383  316  253  467  427 
Television productions 1,124  1,221  1,383  1,121  1,329  1,123 
Filmed entertainment costs, less accumulated amortization 4,248  4,120  3,973  3,597  3,641  3,090 
Inventories, net 11,187  10,553  10,332  9,160  9,534  8,155 
Current portion of inventories, net (3,669) (3,101) (3,291) (2,749) (3,092) (2,784)
Non-current inventories, net 7,518  7,452  7,041  6,411  6,442  5,371 

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

Item Description The company
Inventories, net Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Twenty-First Century Fox Inc.’s inventories, net increased from 2016 to 2017 and from 2017 to 2018.