Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p42
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 42/56)
Character Range: 375670–378723

noted that this would potentially result in a difference for low-value and short-term IP licences between the NFP public sector and other entities. On balance, the Board decided to extend the option to IP licences in the NFP public sector as:

          (a)                    it preferred consistent treatment of all licences within the NFP public sector, noting that IFRS compliance is not a primary objective for the NFP public sector; and

          (b)                   this would reduce the need for public sector preparers to apply judgement to determine whether their short-term and low-value licences are related to IP or non-IP (which would usually not be of great materiality, if at all).

Applying the principles of AASB 15 to non-IP licences

     BC84            As noted in paragraph BC10, the majority of respondents to ED 283 agreed with the Board's decision to apply the principles in AASB 15 to non-IP licences. However, despite support in principle, respondents noted that some activities that extend beyond just administrative activities, including maintaining exclusivity of the licence, periodically monitoring whether the terms of a licence are being met and upholding the integrity of the licence are not just features of a licence, but are in fact performance obligations that enhance the commerciality of the arrangements. These respondents held the view that without the active involvement of the licensor in these activities, there is a risk that the commercial value of the arrangement will not be upheld, potentially exposing the licensor to legal action from the licensee. Respondents noted that the licensor's activities:

          (a)                    serve to maintain confidence in the services, systems and operations of the licensee, upon which the commerciality of the arrangement is underpinned; and

          (b)                   if not performed would substantially detract from the commerciality of the arrangement.

     BC85            In considering this feedback, the Board observed its original decision to apply the principles of AASB 15 to non-IP licences, and specifically noted its decision that, when accounting for non-IP licences, the licensor should disregard the guidance for IP licences in paragraphs B52–B63B. Consequently, the Board analysed the requirements of paragraphs 22–30 to the examples of activities provided by the licensor in paragraph BC84 to determine whether those activities would be considered performance obligations to the customer in accordance with AASB 15.

Identifying performance obligations

Identifying the customer
     BC86            The Board noted that the customer in the licensing arrangement is the licensee and activities undertaken for the benefit of the general public would not be a transfer of goods or services to the customer (ie not performance obligations to the customer) under the general principles of AASB 15. Accordingly, the Board decided it was not necessary to amend the proposals in ED 283 in respect of this issue.

Identifying what is