Document ID: chunk:federal_register_of_legislation:F2023C00402:front:0:p80
Version: federal_register_of_legislation:F2023C00402
Segment Type: other
Provision Reference: 
Character Range: 209027–211936

         the licence exposes the donor to any positive or negative effects of the university's activities; and

                    the university's activities do not result in the transfer of a good or service to the donor as those activities occur.

    Accordingly, the university recognises revenue over time as it satisfies the performance obligation. The university elects to measure its progress towards complete satisfaction of the performance obligation on the basis of an input method, such as labour hours expended.

    Example 3B – Enforceable agreement, sufficiently specific performance obligation, licence granted to donor (right to use IP)

    In this example, the facts of Example 3A apply, except that:

                    the research aims to observe and model traffic flows and patterns along roads potentially affected by a future freeway development and to develop proposals for the freeway interchanges; and

                    the IP (as it then exists) is licensed permanently to donor B at the conclusion of the agreement.

    University A concludes its arrangement with donor B is a contract with a customer as defined in AASB 15. This is on the basis that:

                    University A's promise of specified research and granting of the licence is enforceable as the grant is refundable if the research is not undertaken; and

                    University A identifies that its promise to grant the licence to the donor is sufficiently specific to be a performance obligation. The university determines that the research services are required to develop the IP in order to fulfil the contract and therefore do not, of themselves, give rise to a transfer of goods or services to the donor.

    Accounting treatment

    In accordance with AASB 15, University A allocates the cash grant to its identified performance obligation (granting of the licence to the IP) and recognises the financial asset (cash) and a contract liability of $1.2 million on initial recognition.

    University A concludes that the performance obligation is satisfied at a point in time (the end of the grant period) as the licence provides the donor only with a right to use the entity's IP as it exists when the licence is granted (paragraph B61). That is, the licence provides the donor with a right to use the university's IP as it exists at the end of the grant period. The licence does not provide a right to access the university's IP as the criteria in paragraph B58 are not met.

    Accordingly, the university recognises revenue at the conclusion of the agreement, when the licence is granted to the donor.

    Example 4—Research activities—Transfer of research findings

    Example 4A – Enforceable agreement, sufficiently specific performance obligation, research data only

    Research Institute C receives a cash grant from a donor, Marine Sanctuaries Trust M, of $5.3