After Tax Season CPE – Film Accounting – 14 Hrs

Film Workshops For Professionals

Another tax season is almost over. Once you’ve got your breath back, it’s time to plan your CPE credits for the year. If you’ve been around for a while, the same-old study topics start to feel repetitious.  If you agree, have a look at the largely unknown field of Film Accounting.

FILM INDUSTRY AS AN OPPORTUNITY

Within the film and television industry there are several sources of new revenue opportunities for CPA’s. The most obvious opportunity for CPA’s is to perform audits of the Production Cost Report for the State Film Tax Incentives; however, there are several other opportunities:

  • Administering the State tax credit applications and forms for the production. This can be quite lucrative.
  • Performing the bookkeeping for the “Indie” film, television and documentary productions.
  • Tax Consulting and Filing of the corporate and personal tax returns for the “Indie” productions and producers.
  • Consulting to monetize the State tax incentives.
  • Performing the Post-Accounting duties for the producer (i.e. bookkeeping of the production records after the heavy Shoot Period but before release of the project).

FILM INDUSTRY SPECIFIC PRACTICES

The best way to learn more about the film industry specific practices, terms and unique general ledger software is to come to a workshop. The workshops are hands-on film accounting activities performed with proprietary general ledger software used only in the film and television industry.

FILM ACCOUNTING 101 IN MAY, 2017

The next workshop is in May, before the Memorial Day weekend, in Chicago, IL. According to rave reviews, nobody leaves the workshops bored.

For more information visit http://www.filmaccounting.com 

Cheers,

John Gaskin

John has worked over 50 film and television productions in 6 countries over 30 years. See his resume on IMDb and check the testimonials at http://www.filmaccounting.com

Film/Television Production – Are There Opportunities For CPA’s?

Above-The-Line Budget

Above-The-Line Budget

FILM & TELEVISION PRODUCTION – ARE THERE OPPORTUNITIES FOR CPAs?

The purpose of this article is to point the CPA towards the film, television and commercial production industry. Is it worth learning more about this intriguing industry? Are there opportunities for CPA’s? Read on and you’ll discover for yourself if it’s worthwhile pursuing this industry. From that point you can start to learn more about the specific practices and terminology of Film Accounting.

MEDIA PRODUCTION – DETERMINING THE VALUE OF THE GDP IN AMERICA

For starters, is it worth looking at “Media Production”? From a total dollar value of Gross Domestic Product, I’d have to answer a resounding, Yes! Back in Dec of 2013 the Bureau of Economic Analysis published the first ever analysis of the value of Arts and Culture. They reckoned that Arts and Culture accounted for $504Billion, or 3.2%, of the Gross Domestic Product in 2011. That 3.2% encompasses everything from advertising to arts education to cable distribution and movie production. To give you some idea of how the 3.2% compares to other industries, the Motion Picture Association of America stated that all of Travel and Tourism at that time accounted for 2.8% of the GDP.

I sifted through the published numbers and came up with an approximate value of $273Billion due to various media “production”: cable, network, feature and advertising/commercial production. See my notations on the table below:

BEA-13-58 Media Production

BEA-13-58 Media Production

 

MEDIA PRODUCTION – PER BEA ARTS/CULTURE CONTINUED TO INCREASE IN 2013

On February 6, 2016 the Bureau of Economic Analysis published statistics for 2013 in their document #BEA 16-07.  Here is a quote from the bottom of the second page of that report: “… total inflation-adjusted spending on all arts and cultural commodities reached $1.1 trillion in 2013. That figure was up 2.7 percent from the year before.”

Here’s another shocker for you. It’s a quote from the top of page 4 of the same report: “Employment for all arts and cultural industries totaled 4.74 million in 2013.”

Enough said. There’s plenty of energy in them ‘thar hills!

FILM ACCOUNTING & AUDITING – A NEW SERIES OF SELF-STUDY CPE COURSES

What is the the cycle of the film industry? How does it go from point A to point B? What really is a film producer and how does he/she need help from CPA’s? What are the common accounting practices and terminology used in film and television production?

The “Overview” course is a 2 hour self-study course which has been very well received, as has been the other courses for those wanting to dig deeper into the nitty gritty (Basic, Intermediate and Advanced).

Watch the video above to see how the course works and it’s content.

VALIDATED MATERIAL AND DELIVERY BY TESTIMONIAL AND CERTIFICATION

The courses have been validated by 4 years of workshops, CPE Sponsor licensing, and numerous testimonials. For more info  SEE THIS LINK.

Some Testimonials:

“We have not worked much in the film industry or film tax credits so thought it would be prudent to get a good foundation. Quite frankly, I did not realize how important it was until I took the first of John’s (self-study) courses. We have a wonderful audit department and plan to look into film auditing to add to our services. I am intrigued and enjoy the nuances of film accounting.” E.E.

The film cycle was especially helpful it IS unique to the industry.” T.S.

The course is a great presentation for an overview.” Z.K.

“I felt the objectives of the class provided good insight into the state film tax incentives and the requirements varying by state, and what the qualifying expenses incurred were.” J.B.

Cheers,

John


ABOUT JOHN

The courses are designed and delivered by a film production veteran, John Gaskin, with experience on over 50 film and television productions in 6 different countries over the past 30+ years, as well as 6 years experience as an instructor in film accounting & auditing,  and managing film budgets. John Gaskin has worked with such greats as Ron Howard (twice), David Valdes (Open Range, Green Mile, Unforgiven), George Clooney (Confessions of A Dangerous Mind) and Gulliermo del Torro (Mama).

For more information, 3 minute videos, course samples, etc. SEE THIS LINK.

Film Accounting – New CPE Credits

Now that tax season is over, many CPA’s are planning on the best way to fill their CPE credit requirements. If you’re tired of the same-old-topics, have a look at the largely unknown field of Film Accounting.

FILM INDUSTRY AS AN OPPORTUNITY

Within the film and television industry there are several sources of new revenue opportunities for CPA’s. The most obvious opportunity for CPA’s is to perform audits of the Production Cost Report for the State Film Tax Incentives; however, several other opportunities lurk behind those closed doors, not the least of which is actually doing the film accounting for independent film and television productions.

FILM INDUSTRY SPECIFIC PRACTICES

The best way to learn more about the film industry specific practices, terms and unique general ledger software is to come to a workshop. The workshops are hands-on film accounting activities performed with proprietary general ledger software used in the film and television industry.

FILM ACCOUNTING 101 IN MAY, 2017

The next workshop is in May, before the Memorial Day weekend, in Chicago,IL. According to rave reviews, nobody leaves the workshops bored.

For more information visit http://www.filmaccounting.com/filmaccounting-cpe.htm

Cheers,

John Gaskin

John has worked over 50 film and television productions in 6 countries over 30 years. See his resume on IMDb and check the testimonials at http://www.filmaccounting.com

 

Curbing Film Tax Credit Fraud in Louisiana

Since the inception of the film tax credit in Louisiana there have been about a baker’s dozen fraud charges against local film producers. The newspapers love to rage about the illegal goings-on, of how many years the perpetrators can get in jail and of the madness of Louisiana politics. However, nobody thanks the poor auditor who discovered and ultimately exposed the fraud.

TWO WAYS SUGGESTED TO CURB FRAUD

In an article dated April 6, 2015, the Secretary of the Louisiana Economic Development, Stephen Moret, suggested there were two ways that the state could curb fraud and abuse: regulate accountants who audit the film industry and eliminate related-party payments.

DON’T REGULATE, EDUCATE

I would suggest replacing the word “regulate” with “educate”. Get those CPA’s educated before they even get a chance to audit – that’s what California has done successfully for some time now. It is safe to say that Louisiana already has the most comprehensive set of film audit guidelines for Related Party Transactions in America. However, there seems to be a disconnection between the written rules and the way they’re applied in the Film Industry. Click here to download the 8 page guidelines from the LED web site. See pages 3, 4 and 5.

FILM INDUSTRY PRACTICES

The second suggestion of eliminating related party transactions is like telling Americans not to drive cars because the pollution is killing the planet – it’s true, but just not workable. Simply bring the auditor to an understanding of the internal forms, practices and control points accepted as standard in the industry BEFORE the audit.

THANKS TO THE FORGOTTEN HEROES

So let’s remind ourselves who brought the fraudulent activity to light – the film state tax credit auditor. Okay, sometimes it was found a little late, but found it was … and, here’s a big THANK YOU.

I sincerely hope that you got paid in full before the Producer’s accounts were seized!

Cheers / John

For more information on Film Accounting see my Film Accounting 101 Workshop coming up.

California Dreamin’ – Film Accounting For Film Tax Incentives

My congrats to the California Film Commission for publishing the “Expenditure Tracking Tips”. It not only provides film accountants with practical tips to track “Qualified Expenses”, it also provides a framework of understanding for external auditors who have never been exposed to film and television production.

For film accountants who have completed film and TV tax credited productions in other States (and Provinces), the various rules and processes of capturing and reporting the “Qualified Costs” start to meld together, but never arrive at a universal standard. So, it’s really good to see a single document which “nails” the entire accounting process in a clear voice. Even though this was written by the State of California, it applies universally throughout the United States and Canada.

There are a few unique, and very practical, points that make me want to brag about CA’s “Expenditure Tracking Tips”. Here are three:

  1. Production Assets (Page 6): This is the clearest procedure that I have seen on how to define, and to account for, “Assets” when applying for film tax incentives. Most of the other States don’t help you out with such a clear direction.

 

  1. Related Party Transactions (Page 5): When comparing Audit Instructions from Louisiana, Georgia, Michigan, New Mexico, New York and Connecticut, this is the only place I have found which tells you how to address rentals from a crew member. Is a box rental from a crew member considered a Related Party Transaction?

 

  1. Materials for Verification of Expenditures (Page 7 and 8): Pages 7 and 8 list 20 different types of materials which should be provided to the External Auditor. On that list are several film and television industry unique terms and reports that the External Auditor, or emerging Film Accountant, must gain familiarity with.

My next workshop on Film Accounting 101, is in Atlanta in January. In the workshop we drill the practical basics of a film accountant with a 2 day workshop and 6 live webinars of 1 and 1/2 hours each. To learn more visit http://www.filmaccounting.com .

 

Cheers / John

The Georgia State Film Tax Credit – A 7 Step Cycle

The purpose of this article is to introduce Indie Producers, and CPA’s new to film, the workings of film tax incentives in the booming State of Georgia. In most cases Georgia’s documents are very clearly laid out. In this article I have stripped down the full cycle from start of finish into 7 steps, with references to key forms and legislation, with a tip or two thrown in.

Indie Producers need to know this so they can bring some financing to the table when searching for funding. CPA’s need to know this to be able to provide services to their filmmaking clients.

1. The Rate and Type of Tax Credit Offered

Rate of tax credit is a 20% base + 10% if use the Georgia Logo – a no-brainer – of course we will use the Georgia Logo and add it to the credit roll (5 seconds of exposure required). So, 30% is the rate. Reference: Rules of the GA Dept of Economic Development, Chapter 159-1-1.01(1). The type of tax credit is referred to as a “Transferable Tax Credit”; that is, you can sell the tax credit to a Georgia taxpayer who can then apply that tax credit to their state tax liabilities.

2. Estimate the Tax Credit as Part of the Financing

The Tax Credit is the one thing that the Indie Producer can bring to the table as a Producer. This is key and fundamental to BEING a Producer. Essentially all labor qualifies up to $500,000 per person on payroll, as well as all non-labor costs that have a real Georgia address. So, work through your budget estimating at 30%. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(6)(c) and (d) and (f).

Note that the project will not qualify for the tax credits if it is not fully funded/financed anyway, so estimating the tax credit is a crucial first step to arranging the financing. See Reference: Rules of the GA Dept of Economic Development Chapter 159-1-1.04(3)

3. Applying for Certification to be a “Qualified Project”

See the application form by clicking here. It is pretty straight forward. It’s interesting to note that the application does not require a budget, but it does require a script. Also, the application cannot be made prior to 90 days of principal photography – so, you really should have all of your ducks in a row by then, down to the key cast and crew. Reference: Rules of the GA Dept of Economic Development Chapter 159-1-1.04(1)

4. “Qualified Production Expenses” Gathered in the “Georgia Expenditure Form”

See the Georgia Expenditure Form by clicking here. You would get these costs from the production’s Final Cost Report. Note: The film accountant would need to have a good understanding of what qualified as an expense and be tracking those costs within the general ledger. The State of California publishes a great document called Expenditure Tracking Tips. Download it by clicking here. It’s very useful.

5. Claiming the Tax Credit from the State

See the Film Tax Credit Form by clicking here. You need to file this completed form attached to the original certification received in #1 above, along with the production company’s Georgia income tax return. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(8)(a). Per 560-7-8-.45(8)(b)2 the State has 120 days to review the credit and make a determination. The better the presentation, the faster the review – thus, the recommendations on the Georgia site to use a CPA even though it isn’t mandatory. (BTW I know an experienced Georgia CPA who is quick and excellent if you need one – not me; honestly, it’s not something I like doing).

 6. Selling the Tax Credit (“Letter of Eligibility”)

Once the review is successful the state will issue a “Letter of Eligibility”. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(8)(b)(3). You can now market this letter to the highest bidder. It’s best to use a broker here – again, I have a reliable acquaintance experienced in brokering these Letters of Eligibility. The goal is to sell the tax credit for more than 85% of its value to a Georgia taxpayer who has state tax liabilities. Note that the tax credit can be sold in multiple pieces to different taxpayers; however, the credits cannot be re-sold. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(11)(b).

7. File Notice of Credit Transfer

You’re not quite finished yet. Now you need to file a Notice of Tax Credit Transfer (Form IT Trans) with both the Dept of Economic Development and the Dept of Revenue within 30 days of each sale of the film tax credit. Reference: Rules of the Dept of Rev., Income Tax Div Chapter 560-7-8-.45(11)(d).

Wheww. Now you’re done! If you need help working your way through any part of the above, please send me a comment.

Cheers.

-John

See http://www.filmaccounting.com for my most recent workshops.

Film Accounting – Georgia and New York

GEORGIA GOVERNOR COMMITTED TO FILM PRODUCTION INCENTIVES

Georgia Governor, Nathan Deal, is solidly behind the film tax incentives in Georgia, according to a Georgia news release this month. “Not only has this industry created jobs and investment opportunities for Georgians, it also has revitalized communities, established new educational programs, tourism product and more,” said Deal. “I will continue my commitment to growing this industry and to developing a film-ready workforce to meet the needs of the productions that are setting up shop in Georgia.”

CREATING JOBS FOR GEORGIANS

According to the Motion Picture Association of America (MPAA), the motion picture and television industry is responsible for more than 77,900 jobs and $3.8 billion in total wages in Georgia, including indirect jobs and wages. Nearly 23,500 people are directly employed by the motion picture and television industry in Georgia, including 8,188 production-related employees. These local businesses include technology, lodging, real estate and food service.

CREATING JOBS FOR NEW YORKERS – AND OTHER STATES

Governor Cuomo has been behind New York legislation which has allocated $420 million per year for the calendar years 2015-2019. Louisiana is also booming, at least as much as Georgia. Other States with promising film production statistics are Pennsylvania, Ohio, Illinois, Alaska and New Mexico. Three other States with very good film productive incentives are Massachusetts, Florida and Alabama. Check the incentives map here for current tax incentives by State.

CROSSING OVER TO FILM ACCOUNTING

All this is creating a demand for Film Production Accountants. Film accountants generally train through a series of apprenticeships. A CPA designation is not a requirement; although having a CPA designation would definitely mean a faster rise through the ranks. How do you get your foot in the door? The biggest complaint I hear is, “The Key Accountants only want to hire experienced assistants.” So, the assistants are imported from out-of-town.

HOW DO YOU GET EXPERIENCE IF YOU CAN’T GET HIRED?

A solution is to “get up to speed” in workshops like these, learning the various film accounting techniques by practicing in a controlled environment. We use the unique proprietary film accounting software used in film production, taking the time to clear up the industry specific terms, reports and processes. (Note: this software cannot be purchased, only leased).

See http://www.filmaccounting.com for more information.

Cheers / John

 

Film Accounting – Fresh and Fun CPE

overviewFILM ACCOUNTING COURSES

A few years ago the Connecticut Film Tax Credit Administrator, Ed Ruggiero, asked me to deliver a workshop to CPA’s who were interested in performing audits of film productions for the CT State Tax Credit. I did just that, successfully helping several local CPA’s understand the Film Industry and Film Accounting much better. However, subsequent scheduling of workshops for CT CPA’s was difficult. As a result, I put together 4 online courses as a substitute to a live workshop.

LET YOUR PEERS DO THE TALKING

Online courses have an earned reputation as being rather boring, slow and sometimes downright monotonous. Most of us would rather have a live workshop during the workweek, with lots of interaction among the other attendees and the instructor. However, getting to the workshop location, and breaking away from the office, aren’t always possible – for you or for me. So, how do you evaluate which online CPE course to take? The easiest way is to check out what your peers have said about the courses.

EVALUATION OF MY ONLINE COURSES HAVE A SCORE OF 100%

At the end of each online course qualifying for CPE I ask the student if the “stated objectives of the course” were met. There has never been a “No” yet…. that’s 100% of the time every student has said that the stated objectives were met. Several students also had other good things to say.

A SAMPLE OF ADDITIONAL COMMENTS MADE BY STUDENTS

1. Film Accounting and Auditing – An Overview

  • “Yes. Great introduction of the role the production accountant will play within the overall film production life-cycle.”
  • “Yes – it was pretty much an overview. I feel I have a much better understanding of film accounting now.”
  • “Yes! Very easy to follow. An excellent intro to the industry.”

2. Film Accounting and Auditing – The Basics

  • “Yes, great to see the various sample forms. The workflow charts are also very helpful.”
  • “Yes, the detailed explanations of the various forms, as well as the general ledger software, were very helpful.”
  • “Yes, very useful. I now have a sound understanding of the basic principles of production accounting.”

3. Film Accounting and Auditing – Intermediate

  • “Yes. Great explanation of the inter-relationships between the various reports and overview of the audit plan.”
  • “Yes. Enjoyed the course and learned a great deal about auditing productions.”

For more detailed information about the online courses see http://www.filmaccounting.com/filmaccounting-cpe.htm

If you would like to see the stated objectives of the courses I have listed them below, along with links to short YouTube videos describing each of the course’s content.

Cheers,

John

– John has worked on over 50 film and television productions in 6 countries since 1985 on productions big and small. For more information on his credentials see http://www.filmaccounting.com/filmaccounting-cpe.htm

___________________________________________________________________________________

 

An Overview – The Learning Objective Met By 100% of the Students: The participant will understand the overall business cycle of the Film Industry with specific attention on the workflow, general terminology and film industry specific accounting practices of Film and Television Production. No advanced preparation is required. See this short video reviewing the content of this course.

The Basics Course – The Learning Objective Met By 100% of the Students: The participant will be familiarized with the film production processes, forms and control points of a usual film production. With this knowledge the participant will be “up to speed” with the books and records of a usual film or television production.  No advanced preparation is required. See this short video reviewing the content of this course.

The Intermediate Course – The Learning Objective Met by 100% of the Students: (Prerequisite: An Overview) The participant will understand the interaction among the production entity, the approved budget, the production documents (Call Sheets, Daily Production Reports, etc) and the Final Cost Report – prepared by the film production accountant, this is the document audited for film tax credit certification. From this understanding an external auditor will be able to plan the tax credit audit with an understanding of all industry specific factors.  No advanced preparation is required. See this short video reviewing the content of this course.

The Advanced Course – The Learning Objective Met By 100% of the Students: (Prerequisites: An Overview and Intermediate)The participant will have an understanding of various State requirements to certify the production for Tax Credit purposes. From this understanding participants can confidently comply with their own particular locale’s certification requirements. The categories closely examined are Qualified Expenses (Payroll, Non-Payroll, Real Property) as well as Related Party Transactions, Ownership and Sources of Funds. No advance preparation is required. See this short video reviewing the content of this course.

It’s After Tax Season – CPE On Film Accounting – 23 Hrs

Now that tax season is over, many CPA’s are planning on the best way to fill their CPE credit requirements. If you’re tired of the same-old-topics, have a look at the largely unknown field of Film Accounting.

FILM INDUSTRY AS AN OPPORTUNITY

Within the film and television industry there are several sources of new revenue opportunities for CPA’s. The most obvious opportunity for CPA’s is to perform audits of the Production Cost Report for the State Film Tax Incentives; however, several other opportunities lurk behind those closed doors, not the least of which is actually doing the film accounting for independent film and television productions.

FILM INDUSTRY SPECIFIC PRACTICES

The best way to learn more about the film industry specific practices, terms and unique general ledger software is to come to a workshop. The workshops are hands-on film accounting activities performed with proprietary general ledger software used in the film and television industry.

FILM ACCOUNTING 101 IN MAY, 2014

The next workshop is in May, before the Memorial Day weekend, in Los Angeles. According to rave reviews, nobody leaves the workshops bored. As of Sunday, April 27th, there are 4 seats open (really) as I only take a maximum of 20.

For more information visit http://www.filmaccounting.com

Cheers,

John Gaskin

John has worked over 50 film and television productions in 6 countries over 30 years. See his resume on IMDb and check the testimonials at http://www.filmaccounting.com

 

Film Accounting – The Quandary of Breaking In

Any person who wants to break into Film Accounting as a profession has a very hard time of it. The film producers don’t budget for “training” – they want somebody to walk into the position and GO-GO-GO.

Is Film Accounting That Different?

It’s not that film accounting is particularly difficult, or even that different. It’s the same principles as other industries, like construction for instance. The big three functions of Bookkeeping, Internal Controls and Reporting are true for film accounting just as they are for other industries. The biggest difference is rooted in the film industry specific practices, terminology and film accounting software systems which are virtually unknown outside of the film production industry.

Producers and the “Key” Film Accountants Want Experienced People

Most film accountants aren’t certified accountants in any other field – although if you have experience as a bookkeeper or CPA behind you it’s a heck of a lot easier to advance. Film Production Accountants are simply smart people, not allergic to fast pace and long-ish hours, who have worked their way into that position. The apprenticeship system still works, but when more and more demand is put on film producers to produce faster, cheaper, better, there’s less and less room for an apprentice. So, how do you get experience?

How To Solve This Quandary?

The only way I know of is to train as a film assistant accountant in a workshop environment using the film accounting software systems known only within the film industry. You will be saturated with film industry specific practices and terminology, all while learning the practical aspects of the unique film accounting software generally used in film production.

Come to my next intensive workshop in Los Angeles on May 17/18, 2014. It is 23 hours of CPE.

See my website at http://www.filmaccounting.com for more details. Most of my workshops are held in Louisiana, Atlanta, Detroit and Toronto. This is only the fourth time that I’ve been back to Los Angeles in the past 4 years, so don’t miss it!

Regards to all,

John Gaskin

Veteran of over 50 film and television productions in 6 different countries. See IMDb for credits.

 

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