![]() However, the unknown obligations are expected to be significant. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. dollar currencies are translated to the U.S. Although the Company is in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company's balance sheet for real estate operating leases.Ĭontent obligations include amounts related to the acquisition, licensing and production of streaming content. The Company will adopt ASU 2016-02 in the first quarter of 2019 and is in the process of implementing changes to its systems and processes in conjunction with its review of lease agreements. ASU 2016-02 is effective for fiscal years beginning after Decem(including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current GAAP. Actual results may differ from these estimates. ![]() On a regular basis, the Company evaluates the assumptions, judgments and estimates. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Significant items subject to such estimates and assumptions include the streaming content asset amortization policy and the recognition and measurement of income tax assets and liabilities. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. ![]() The preparation of consolidated financial statements in conformity with U.S. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K, as amended by Form 10-K/A, for the year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on February 5, 2018. The accompanying interim consolidated financial statements of Netflix, Inc.
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