Film Accounting Glossary
Qualified spend
What is qualified spend?
Also called qualifying spend, eligible spend, or qualified expenditure.
Qualified spend is production expenditure that counts toward an incentive claim under the rules of a specific program, generally goods and services purchased from vendors in the jurisdiction and used there.
Programs differ on how they treat rentals, out-of-state purchases delivered locally, related-party transactions, fringes, and financing costs. The practical consequence is that qualified and non-qualified costs need separate account coding from the first invoice, since sorting the ledger retroactively is far more expensive.
Example
$7M spent in-state, of which $6.1M qualifies once out-of-state purchases, financing fees, and development are stripped out. At 30% that is $1.83M rather than the $2.1M a face-value calculation on the full spend would suggest.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Coded in separate accounts from the first invoice, then tested by the jurisdiction's approved auditor against the final cost report.
Common mistake
Assuming a vendor's location does not matter because the work happened locally. Many programs test where the vendor is, not just where the goods were used.
Related questions
- What counts as qualified spend for a film incentive?
- Generally goods and services bought from vendors in the jurisdiction and used there. Programs differ on rentals, related parties, fringes, and financing costs.
- How is qualified spend evidenced?
- Through invoices, proof of payment, vendor location, and account coding, all tested by the jurisdiction's approved auditor against the final cost report.