this post was submitted on 04 Oct 2024
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Is there someone who understands / can explain the tax principles behind the removal? I see the term impairment charge mentioned in the article. Best I can tell, the company is saying their book value is higher than the actual value of the item, so they can take the loss and write it off. But why does that necessitate removing it?
Is this also the reason that Disney used to put stuff into "the vault" back in the day?
I'm all on board with piracy-first (I don't even bother to figure out how to pay for movies/TV anymore because piracy is so much more convenient), but I want to be able to explain to a layman why things are getting worse.
Not an accountant but I assume they have to pay members of the cast and crew for having it on their streaming service and, potentially license other content (like songs). In the contracts it'll say they have to pay a lump sum for removing it early and they have figured that this would be the cheaper option.
That makes sense, thanks.