Maybe. Under US GAAP, the accounting for recorded music is governed by Financial Accounting Standards No. 50, Financial Reporting in the Record and Music Industry.
FAS No. 50 says in part that:
The portion of the cost of a record master borne by the record company shall be reported as an asset if the past performance and current popularity of the artist provides a sound basis for estimating that the cost will be recovered from future sales. Otherwise, that cost shall be charged to expense. The amount recognized as an asset shall be amortized over the estimated life of the recorded performance using a method that reasonably relates the amount to the net revenue expected to be realized.
If you believe that the performance provides a “sound basis” for an estimate that the cost will be recovered from future sales, you can treat the cost as an asset. Otherwise, you’ll need to expense it. The real question is not whether you have the right to use the recorded music on future projects; it’s whether there is a reasonable expectation that you can produce future revenue by doing so. If you purchased a sound clip for a very specific project and aren’t in the business of regularly making commercials for similar projects, there’s probably not a reasonable basis to estimate that you can produce future revenue from the clip. If you purchased a clip of car sounds and are in the business of making automobile commercials, you probably do have a “sound basis” to estimate that you can use the clip to produce future sales.
In QuickBooks, if you treat the cost of this recorded music as an asset, it would be a non-current asset. You would not use a tool such as the Fixed Asset Manager to account for it. The non-current asset account you enter when you write a check or enter a vendor bill to pay for the recorded music would be debited (i. e., increased). Later, you’ll need to amortize the cost of the recorded music over the useful life consistent with FAS No. 50. QuickBooks uses the term other current asset in place of non-current asset. See our article on general ledger account types used by QuickBooks for more information.
If you opt to treat the cost as a non-current asset, be conservative in estimating the useful life of the music. If you over-estimate the useful life, you’re inflating your assets and net income until you’re finished amortizing the asset.
If you determine that there isn’t a basis to estimate that the cost of the recorded music will be recovered from future sales, you’ll need to treat the cost as an expense. In that event, the expense account you enter when you write a check of enter a vendor bill to pay for the music would be debited.
Of course, if you have any doubt about applying an accounting standard like FAS No. 50 to your business, it’s a good idea to consult a CPA.