FILM INVENTORY

12 Months Ended

Dec. 31, 2011

FILM INVENTORY

FILM INVENTORY

12. FILM INVENTORY

        Development costs are accounted for pursuant to FASB ASC Topic 926, Entertainment—Films. The development costs for films, including direct costs, production overhead and interest, are capitalized and amortized using the individual-film-forecast computation method under which such costs are amortized for each project in the ratio that revenue earned in the current period for such project bears to management's estimate of the ultimate revenues to be realized from all media and markets for such project. Capitalized film development costs as of December 31, 2011 and 2010 totaled $4.7 million and $0.7 million, respectively.

        Film inventory as of December 31, 2011 and 2010 are summarized as follows (in thousands):

	December 31,
	2011		2010
In Production:
Feature animation project	$	3,926	$	—
Film development projects		794		682
Total Film Inventory	$	4,720	$	682

        Management regularly reviews, and revises when necessary, its ultimate revenue estimates on a project-by-project basis, which may result in a change in the rate of amortization applicable to such project and/or a write-down of the value of such project to estimated fair value. These revisions can result in significant period-to-period fluctuations in project write-downs and rates of amortization. If a total net loss is projected for a particular project, the associated film costs are written down to estimated fair value. During 2011, the Company wrote off $4.8 million of costs for a film project with no future value.