Zack developed software that helps farmers to plow their fields in a manner that prevents erosion and maximizes
Zack developed software that helps farmers to plow their fields in a manner that prevents erosion and maximizes
the effectiveness of irrigation. Sparky paid a licensing fee of $60,000 for a copy of the software. Although Sparky can use the software as long as it wants, Zack expects that Sparky will use the software for approximately 5 years. Zack will not have any continuing involvement with Sparky following transfer of the license. How much revenue should Zack recognize in the first year of the contract?
| $12,000 |
| $15,000 |
| $60,000 |
| $ 0 |
Which of the following is not true?
| License fees are recognized over time for any license that is viewed as providing a right of access. |
| Licensing fees are recognized as revenue over time for any licenses for which the seller expects its ongoing activities to affect the benefits that the buyer receives from intellectual property. |
| License fees are recognized as revenue at a point in time if the buyer expects that the seller’s future activities will not affect the benefit the buyer derives from the intellectual property. |
| Licensing fees always are recognized as revenue at the end of the license period, when the seller has completed its performance obligation to provide access to its intellectual property. |
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