Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p94
Version: federal_register_of_legislation:F2023C00402
Segment Type: other
Provision Reference: 
Character Range: 247059–250073

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 B) is identified as the customer. Licensee has entered into an arrangement with Licensor to obtain goods or services that are an output of Licensor's ordinary activities in exchange for consideration.

    What are the goods and services promised in the arrangement?

    Applying paragraphs G18–G21, Licensor concludes the only goods and services transferred to Licensee (the customer) is the licence itself, being the 'right to perform' gambling activities.

    Licensor observes that the following promises/activities are not performance obligations as they do not transfer additional goods or services to Licensee, beyond the licence itself, but instead either confirm the attributes promised at inception of the licence or confirm that the terms of the licence have been met:

                    refraining from issuing new casino licences in geographical location C as the licence is exclusive (ie an exclusive licence is issued and continues throughout the licence period); and

                    performing regulatory activities to monitor that Licensee continues to meet the eligibility criteria (including that the gaming offered is honest and free from criminal influence) during the period of the licence. The Licensee must meet the eligibility criteria to be issued the licence and controls whether the criteria continue to be met, so no additional goods or services are provided by the licensor.

    Licensor does not identify any remaining promises to transfer a good or service to Licensee in the arrangement that are distinct from the licence.

    Licensor concludes there is a single distinct performance obligation to issue the licence.

    Example 8B – Distinct goods or services

    In this example, the facts of Example 8A apply, except that, in addition to issuing the licence, Licensor will perform maintenance of Licensee's gaming machines throughout the licence term to ensure that the gaming machines are in working order, have not been tampered with and are not in need of repair. If such services were not provided by Licensor, it is expected that Licensee would engage a third party to carry out the maintenance services to provide assurance to Licensee's patrons that the machines are functioning as they should be. In addition:

                    Licensor observes that, based on market conditions, a customer in the market for such maintenance services would be willing to pay $5 million; and

                    the upfront payment of $100 million includes the maintenance services.

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

    Licensor concludes on the same basis as Example 8A that its arrangement to issue a non-IP licence to