Film Accounting Glossary
Year-end close
What is year-end close?
Also called year end, or fiscal year close.
Year-end close is the process of finalizing a company's books for its financial year: posting accruals, reconciling every account, valuing work in progress on unfinished productions, and preparing statements and tax filings.
For a production spanning a year end, it means splitting cost between two fiscal periods even though the picture is one continuous project. It also generates the W-2s, 1099s, and K-1s that everyone who worked on the show is waiting for.
Example
A shoot spanning December splits across two fiscal years even though it is one continuous project: accruals posted, work in progress valued on the unfinished picture, and then the W-2s, 1099s, and K-1s that everyone who worked on the show is waiting for.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Company-level rather than production-level, but it lands on the production's books whenever a shoot straddles the year end.
Common mistake
Leaving a shoot that straddles the year end to be split later. Accruals and work in progress have to be valued at the cut-off, not reconstructed in March.
Related questions
- What happens at year-end close on a production company?
- Accruals are posted, accounts reconciled, work in progress on unfinished pictures valued, and statements and tax filings prepared.
- When do crew receive W-2s and 1099s?
- They follow year-end close, issued by the payroll company and the production entity within the statutory deadlines in the new year.