Sales- and usage-based royalties

When an entity earns royalties based on the extent to which a customer uses or benefits (through onward sales) from a license of Intellectual Property (IP), it has transferred control of the IP to its customer, with uncertainty over the amount of consideration (i.e. the consideration is variable). As an exception to the general principles in IFRS 15 that revenue is recognised when control of a good or service has been transferred to a customer and measured at an amount … Continue reading

Identify Software industry obligations – Combined services

This is an example in a small series for illustrating the concepts in What is a good or service that is distinct?

Scenario C                                            >>>>> See scenario A here, and scenario B here

The vendor’s contract with its customer is the same as in scenario B, except that:… Continue reading

Identify Software industry obligations – Customisation

This is an example in a small series for illustrating the concepts in What is a good or service that is distinct?

Scenario B                                            >>>>> See scenario A here, and scenario C here

The vendor’s contract with its customer is the same as in scenario A, except that as part of the installation service the software is to … Continue reading

Identify Software industry obligations – Distinct service

This is an example in a small series for illustrating the concepts in What is a good or service that is distinct?

Scenario A                                            >>>>> See scenario B here, and scenario C here

A vendor enters into a contract with a customer to supply a license for a standard ‘off the shelf’ software package, install the software, and … Continue reading