Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p93
Version: federal_register_of_legislation:F2023C00402
Segment Type: other
Provision Reference: 
Character Range: 244286–247334

criminal influence or exploitation, and gaming in the casino is conducted honestly; and

                    the cost for issuing the casino licence (including surveying the proposed gaming premises and the upfront and ongoing regulatory activities) is expected to be $100,000.

    Applying the accounting framework for licences issued by not-for-profit public sector licensors

    Is the arrangement a licence or a tax?

    Licensor applies paragraph G3 and concludes its arrangement with Licensee is not a tax, on the basis that the majority of the indicators support a licence classification:

                    it is a discretionary arrangement entered into by each of the parties;

                    its primary purpose is not generating income for the public sector, but ensuring that the participation of the general public in gaming activities is controlled, provided in a safe environment and protected from criminal influence and exploitation. The low costs of $100,000 in comparison to the licence payment of $100 million may be indicative of a tax element (see below);

                    it contains an obligation for Licensor to issue a casino licence, and creates enforceable rights for Licensee to conduct gaming activities;

                    it gives Licensee specific permission to provide gaming activities which would otherwise be unlawful;

                    there is no underlying asset of Licensor that is transferred to Licensee.

    Licensor applies paragraphs G4–G6 and concludes there is no tax element that needs to be separated. Although the arrangement has a low cost in relation to the consideration received, which might be indicative of a tax element, the transaction price is not refundable, and there is no other evidence indicating similar activities operating through different structures (such as online gaming) are subject to a tax. Accordingly, the criteria necessary to rebut the presumption for Licensor to allocate the transaction price of $100 million wholly to the licence are not satisfied.

    Is it a low-value or short-term licence?

    Applying paragraphs Aus8.1 and G22–G27, Licensor concludes that its arrangement with Licensee is not a low-value or short-term licence because the transaction price of the licence is $100 million and the term of the licence is 10 years.

    Is it an intellectual property (IP) licence?

    Applying paragraph G13, Licensor concludes its arrangement with Licensee is a non-IP licence as the arrangement does not involve rights over IP of Licensor.

    Is the non-IP licence a lease or does it contain a lease?

    Applying paragraphs Aus5.2 and G14(a), Licensor concludes its arrangement with Licensee gives Licensee a right to perform an activity (ie operate a casino) rather than conveying a right over an identified asset of the Licensor. Therefore the arrangement is not a lease and does not contain a lease.

    Identifying the performance obligation

    Who is the customer?

    Applying paragraph G16, Licensee (Casino Operator