BIR Ruling No. 220-61

April 21, 1961 BIR RULING NO. 220-61 Ponce Enrile, Siguion Reyna, Montecillo & Belo Seventh Floor, Soriano Bldg. Manila Attention : Mr . M . G . Montecillo Gentlemen : Referring to your letter of the 19th instant, I have the honor to inform you that the terms "Proportionate Cost of Production" and "Proportionate Cost of Right" refer to the portion of the cost of production or cost of distribution and exhibition right chargeable during the taxable year. To illustrate if a picture, produced at a cost of P1,500,000, was released on July 1, 1960, and its cost is to be recovered over a period of eighteen months, the "Proportionate Cost of Production" to be allocated during the calendar year 1960 should be P500,000 only. The illustration holds true also if the distribution and exhibition right of a picture is acquired from an independent outside producer, in which case the "Proportionate Cost of Right" should likewise be P500,000. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue