Amazon, Netflix Spur TV Accounting to Emerge From the ‘90s

Viewers who used to wait for each “Seinfield” episode on prime-time can now binge-watch a whole season of “Stranger Things” in one sitting.

Yet the rules entertainment companies follow to account for the costs of making a show have been stuck in the “Seinfeld” era—until now.

The Financial Accounting Standards Board March 6 issued an update to U.S. generally accepted accounting principles to allow entertainment companies to capitalize, or spread out the costs over several reporting periods, of making “episodic content.” The update erases the accounting distinction between the costs to make TV shows versus films, a distinction that has ...