This free, guided checker walks your finance team through the key decision points for IFRS 15 Licensing of Intellectual Property. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
IP licenses include software, media content, patents, trademarks, and franchise rights where the customer obtains a right to use or access the licensor's IP as part of the contract.
Apply general IFRS 15 guidance without the licensing-specific criteria.
Official guidance: IFRS issued standards
Functional IP has significant standalone functionality such as software or media that performs a task, while symbolic IP derives value from the licensor's continuing activities such as brands or franchises.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
A right-to-use license transfers control at a point in time when the customer can use and benefit from the IP as it exists without requiring the licensor to continue supporting or updating the IP.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
Point-in-time recognition applies when the customer can direct use of the licensed IP without further required licensor activities, subject to any usage restrictions in the contract.
Identify the control transfer date before recognizing license revenue.
Official guidance: IFRS issued standards
A right-to-access license requires the licensor's continuing activities that significantly affect the IP, such as updates, maintenance, or brand support, and revenue is recognized over time.
Complete the right-to-access versus right-to-use analysis before recognizing revenue.
Official guidance: IFRS issued standards
Over-time recognition follows the pattern of transfer, often straight-line over the access period unless another method better reflects how control transfers.
Select and apply an over-time progress measure before period-end close.
Official guidance: IFRS issued standards
Sales- or usage-based royalties in exchange for a license of IP are excluded from the variable consideration constraint until the subsequent sale or usage occurs, unless another promised good is the primary item.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
The exception applies when royalties are for a license of IP rather than another promised good; IFRS 15.B65 then requires recognizing revenue when the customer's subsequent sales or usage happen.
Defer royalty revenue until the subsequent sale or usage threshold is met.
Official guidance: IFRS issued standards
A distinct license is separately identifiable; a license combined with customization or other services may require a single performance obligation recognized over time.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
Standalone selling price or estimation methods allocate fixed and variable consideration to the license when it is distinct from other promised goods or services.
Complete transaction price allocation before recognizing license revenue.
Official guidance: IFRS issued standards
Fixed license fees and non-royalty variable amounts require the general constraint on variable consideration before inclusion in the transaction price, unlike sales- or usage-based royalties for IP licenses.
Use the interactive tool above to see how this applies to your situation.
Official guidance: IFRS issued standards
Disclosures include significant judgments on right-to-access versus right-to-use, timing of revenue, and disaggregation of licensing revenue categories including royalty streams.
Finalize licensing revenue recognition and IFRS 15 note disclosures. Prepare licensing revenue disclosures before authorization.
Official guidance: IFRS issued standards
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