Film Accounting Glossary
Development costs
What are development costs?
Also called development spend.
Development costs are everything spent before a picture is greenlit: option payments, writer fees, research, script clearance, legal work, and packaging expenses.
If the project goes into production those costs are usually rolled into the budget as an above-the-line line item; if it does not, they are written off or held as an abandoned project. Many jurisdictions exclude development spend from qualifying costs, so it has to be tracked separately from day one.
Example
Before greenlight: $40,000 in option payments over three years, $180,000 in writer fees across four drafts, $22,000 of legal and script clearance. If the picture goes, that $242,000 rolls into the budget above the line. If it does not, it is written off.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
An above-the-line line item once production starts, and tracked separately from day one because most jurisdictions exclude development from qualifying spend.
Common mistake
Letting development spend mix into production accounts. Most incentive programs exclude it, and separating it retroactively is far harder than coding it apart from the start.
Related questions
- What counts as development cost on a film?
- Option payments, writer fees, research, script clearance, legal work, and packaging expenses: everything spent before the picture is greenlit.
- Do development costs qualify for film tax incentives?
- Usually not. Most programs count spend from pre-production onward, so development has to be tracked separately to keep it out of the claim.