Accounting Issues

Accounting and Measurement Issues in Multi-Media Conglomerates

I. Introduction

We are all familiar with the following titles: CNN News, the Super bowl, the movie Lion King, and The Tonight Show with Jay Leno. While sitting in our favorite lounge chair enjoying these shows for entertainment, the thought of the business component of the media industry rarely enters our minds. Multi-media conglomerates such as Time Warner Corporation, News Corporation, The Walt Disney Company and NBC Universal are the companies behind these entertaining shows respectively.

In many instances, the media business is a distinctive industry. Unlike other industries, multi-media companies deal with ideas, information, and entertainment. Regardless of the role multi-media companies play in informing us and influencing our daily lives, it is a multi-billion dollar business. Nearly all major media corporations are commercial corporations, whose primary function is creating profits for owners or stockholders (Croteau and Hoynes1). Although media companies have a unique distinction in the products or services they provide, media companies are similar to other industries because they are required to comply with accounting standards. The purpose of accounting standards is to provide a reader (an investor in the personal finance world) with a clear and accurate accounting picture of how a company is doing. Media companies’ accounting and measurement issues may not be as evident as other industries, but these media conglomerates face issues and circumstances that have an impact on the free market. These issues and circumstances affecting multi-media conglomerates will be discussed in more detail in the following paragraphs. In conclusion, I will infer from these circumstances the accounting issues that may occur due to these matters.

2. Conglomerates-Big Media and Deregulation

A conglomerate is defined as a corporation consisting of a number of subsidiary companies or...