"Is there is such a concept as a 'deferred advance'?"

Q: Breslin in Tullamore asks if there is such a concept as a “deferred advance”, as a manager has mentioned it to them?

A: I have to hold my hand up here and say I’ve never heard of a deferred advance nor can I find it mentioned anywhere. That is not to say it doesn’t exist, just that I have never come across it. In fact it would seem to be a contradiction in terms. An advance by definition is a payment before the occurrence of a specific event, in the expectation that said event will earn substantially greater money than the initial advance. You don’t mention how long the advance is to be deferred for, but if for example it is to be deferred until the royalties from the sale of the album start to arrive, then it can’t be described as an advance at all but rather a simple payment of royalties due. The only other reasons I can think of where an advance might be deferred is for tax or cashflow reasons. But you don’t want to be found guilty of evading tax (very illegal) and you certainly don’t want your record company to have cashflow problems.

Answers supplied by O.J. Kilkenny and Co. Chartered Accountants, specialists in the entertainment industry. Contact: [email protected] or call Alan Duffy (01) 661 1588