How Hollywood cooks the books

Intelligent Investor

Independent Financial Research

Disney (NYSE:DIS) will make a fortune from the new Star Wars film. But that’s no guarantee anyone else will. Star Wars: Return of the Jedi, Forrest Gump and Harry Potter and the order of the Phoenix were very popular films. But according to Hollywood accounting practices, none of them made a profit. The release of the new Star Wars Movie on Thursday night may well become one of the top three grossing movies of all time. It may also turn out to be just as ‘unprofitable’ as Return of the Jedi. How so? Because Hollywood accountants are just as creative as those hired to act, direct or design the special effects. They don’t subscribe to the common accounting rule that profit is revenue minus costs, instead finding a way to actually take their profit before any expenses are deducted. Neat eh? Read full article here: (VIEW LINK)


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