Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p38
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 38/56)
Character Range: 363516–367259

specified quota of a good, regardless of whether or not the licensee subsequently chooses or manages to take the specified quota.

     BC72            The Board asked a specific question in ED 283 to understand whether there were any examples of distinct non-IP licences involving an asset of the licensor. Respondents to ED 283 noted a small number, such as mooring licences and road occupancy licences, however the Board noted that the licences identified are not common examples, and would not represent a significant amount of an NFP public sector entity's overall revenue from licences. The Board therefore decided that Standard-setting activities were not warranted, and that if a NFP public sector entity did happen to have a material amount of revenue from these licences, the guidance for non-IP licences involving a right to perform would be sufficient.

Options for amending AASB 15 to account for revenue from licences
     BC73            The Board concluded that most licences issued by NFP public sector licensors are either IP licences or non-IP licences involving the right to perform an activity. Based on this, the Board observed that it would not be appropriate to simply apply the guidance for IP licences by analogy (due to the challenges for non-IP licences involving the right to perform an activity noted in BC65, but instead analysed four possible options for prescribing the accounting for revenue from licences issued by NFP public sector licensors. A summary of the options considered by the Board is detailed below:

                                    Option 1                                                                                      Option 2                                                                                              Option 3                                                                                                                                                Option 4
What is it?                         All licences:                                                                                   (i)  IP licences: Apply principles from paragraphs B52 to B63B in AASB 15;                          All licences: Practical expedients, being any one, or a combination  of the following:                                                                  All licences: Split all licence transactions between a licence and a tax (consistent with GFS accounting for licences and taxes), where the reasonable price for the performance obligation is considered a licence and accounted for under AASB 15 (which may need specific guidance) and the 'excess' over the reasonable price for the performance obligation is considered a tax and accounted for under AASB 1058.
                                      (i)  Apply (unamended) principles from paragraphs B52 to B63B in AASB 15                      (ii)  Non-IP licences: Develop guidance based on general  principles from AASB 15; and                 (i)         Recognise revenue for all licences (IP and non-IP) at a point in time (upfront when licence is issued);
                                      (ii)  Add implementation guidance and examples to help licensors apply (i) to all licences    (iii)   IP and non-IP licences: Add implementation examples to help licensors apply (i) and (ii).      (ii)       Recognise revenue for all licences (IP and non-IP) over time[2];
                                                                                                                                                                                                                                           (iii)     Recognise revenue for all short-term licences (≤1 year)  at a point in time (upfront) and all long-term