Reference no: EM131755936

You work for Tiger's Door, a publicly traded movie production company. Tiger's Door plans to release "Star Flight," a children's action movie, toward the beginning of the next period. To promote the film, Tiger's Door has arranged to include promotional toys in children's meals sold by Cluckin' Hen, a national fast food chain. The CEO wants to recognize licensing fee revenue from the fast food arrangement as it is realized, explaining that he sees no reason to delay such recognition. The CFO wants to delay recognition until the release of the film, reasoning that the toy revenue is a "byproduct" of the related film, and recognition of that revenue should wait until release of the film.

Research the appropriate Codification and draft a memo explaining whether either the CEO's or the CFO's proposals are valid under U.S. GAAP and citing your references.