If a promise to grant a license is distinct, the entity shall apply the specific principles to determine whether the license provides the customer a right to access or a right to use the entity's intellectual property.
If a promise to grant a license is distinct, the entity shall apply the specific principles to determine whether the license provides the customer a right to access or a right to use the entity's intellectual property.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Under franchise in accounting. Number 2 only.
Transcribed Image Text:1. The current PFRSS do not address the accounting for revenues
from franchise contracts.
2. If a promise to grant a license is distinct, the entity shall apply
the specific principles to determine whether the license
provides the customer a right to access or a right to use the
entity's intellectual property.
3. If the intellectual property to which the customer has rights
does not change over the license period, the nature of the
entity's promise to transfer the license is most likely a "right to
access."
4. If the nature of an entity's promise to transfer a license is a
"right to use," revenue shall be recognized at a point in time.
5. According to PFRS 15, revenue is measured at the fair value of
the consideration received or receivable in the contract.
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