Film Accounting Glossary
Deferment
What is a deferment?
Also called deferral, or deferred fee.
A deferment is compensation a participant agrees to postpone, taking a reduced or zero fee during production in exchange for payment later out of revenue or at a defined trigger.
Deferments lower the cash budget without lowering the true cost of the picture, so they have to be tracked as liabilities and disclosed in the financing plan. Their position in the waterfall determines whether they are ever actually paid.
Example
A director takes $75,000 instead of a $250,000 fee, with the $175,000 deferred to a defined position in the waterfall. Cash budget drops $175,000; the true cost of the picture does not, and the deferment is carried as a liability until it is paid or expires.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Disclosed in the financing plan and tracked as a liability. Its position in the waterfall decides whether it is ever actually paid.
Common mistake
Presenting a deferment as a budget saving. Cash need drops, but the obligation is real and sits in the waterfall, where it may or may not ever be reached.
Related questions
- Is a deferment the same as a fee reduction?
- No. A reduction lowers the cost permanently. A deferment postpones it, leaving a liability payable from revenue at a defined point in the waterfall.
- Do film deferments usually get paid?
- It depends entirely on position. Deferments typically sit behind all debt and equity, so on a picture that recoups slowly they are frequently paid partly or not at all.