Alliance Atlantis Communications Inc. is a fully integrated supplier of entertainment products to the television and motion picture production industries. One of its products is television series that it sells to TV networks. Often these series involve the development of an idea and production of a pilot show. This is followed by attempts to market the show to television stations. If the series is sold, weekly shows are produced for later airing by participating stations.
Required:
Discuss the revenue generation process of this kind of television series, emphasizing the critical points in the revenue recognition process and pointing out the similarities and differences between the revenue process for Alliance Atlantis and for a company that manufactures television sets.