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Hi there,
I’m really hoping someone can help with this one...
1) my company (company a) recently separated one of its business areas into its own commercial subsidiary (name company b). Company b makes tv scripts and short films.
2) the opening wip on the bs for this commercial subsidiary (b) was the ytd actuals spent on materials pre separation.
3) company a has become one of company b’s biggest customers.
4) company a has tried to buy films from company b since separation. Company b has invoiced company a for the full amount of the cost of the film.
5) company a has argued that they should not be invoiced for the script of the film as that was “paid for” by company a pre separation.
6) Company a also owns the ip on all scripts developed pre separation.
7) should company a be:
- invoiced for the cost of the script if they intend on buying the film?
- invoiced for all scripts even if they do not become films as they own the ip?
If company a was not invoiced for the cost of the script - the film made by company b would not have any revenue to recognise for this Script.
Any help given would be greatly appreciated - with Ideally reference to accounting standards.
Best
Lewis
I’m really hoping someone can help with this one...
1) my company (company a) recently separated one of its business areas into its own commercial subsidiary (name company b). Company b makes tv scripts and short films.
2) the opening wip on the bs for this commercial subsidiary (b) was the ytd actuals spent on materials pre separation.
3) company a has become one of company b’s biggest customers.
4) company a has tried to buy films from company b since separation. Company b has invoiced company a for the full amount of the cost of the film.
5) company a has argued that they should not be invoiced for the script of the film as that was “paid for” by company a pre separation.
6) Company a also owns the ip on all scripts developed pre separation.
7) should company a be:
- invoiced for the cost of the script if they intend on buying the film?
- invoiced for all scripts even if they do not become films as they own the ip?
If company a was not invoiced for the cost of the script - the film made by company b would not have any revenue to recognise for this Script.
Any help given would be greatly appreciated - with Ideally reference to accounting standards.
Best
Lewis