Film Accounting Glossary
Amortization
What is amortization?
Amortization is the spreading of a cost across the episodes, seasons, or revenue periods it benefits instead of charging it all to one place.
On a series, the cost of building a standing set or acquiring a hero picture car is amortized across the episode count, so each episode carries its share. Studios also amortize negative cost against projected revenue, which is what drives the ultimate-revenue accounting behind participation statements.
Example
A standing set costs $780,000 and appears in all ten episodes of a season. Amortized evenly, each episode carries $78,000, so no single episode absorbs a cost the whole season uses.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Series budgets and the pattern budget. At company level, the same mechanic amortizes negative cost against a title's projected ultimate revenue.
Common mistake
Charging a standing set or a hero vehicle entirely to the episode that built it. That episode looks catastrophic and every later one looks artificially cheap.
Related questions
- How is a standing set amortized across a season?
- Its cost is spread across the episodes that use it, usually evenly across the order, so each episode carries a proportionate share rather than the build landing in one.
- What is the difference between amortization and depreciation?
- Depreciation spreads the cost of a physical asset over its useful life. Amortization spreads a cost across the episodes or revenue periods that benefit from it.