Document ID: chunk:federal_register_of_legislation:F2023C00402:reg:97:p43
Version: federal_register_of_legislation:F2023C00402
Segment Type: reg
Provision Reference: reg 97 (pt 43/56)
Character Range: 378486–381251

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 a good or service
     BC87             As noted in paragraphs BC47–BC50, the Board considered that issuing a right to perform would constitute a good or service for the purpose of AASB 15. The Board noted that a right to perform an activity might also have attributes attached, such as exclusivity. The Board noted that upholding the exclusivity of the right to perform that activity over the term of the licence would not be a separate good or service (and thus a performance obligation) as it does not transfer anything extra to the licensee than the original licence they received on day 1. In other words, exclusivity is an attribute and within the boundary of the licence (the good or service) that has been promised to the licensee. Therefore any activities to set up or maintain these exclusivity conditions are not performance obligations.

     BC88            Another example of this would be an arrangement where a licensee needs to fulfil eligibility criteria prior to being granted a right to perform activities, and the licensor is required to perform activities to ensure that the eligibility criteria have been met prior to issuing the licence and throughout the term of the licence. Meeting the eligibility criteria is under the control of the licensee and types of activities performed by a licensor do not transfer an additional good or service to the licensee, as they merely confirm the licensee continues to meet its obligations and there is no change to the nature of the licence offered as a result of the activities performed by the licensor to check that these eligibility criteria have been fulfilled.

     BC89            Accordingly, based on the considerations in paragraphs BC87 and BC88, the Board clarified that exclusivity and eligibility checking activities are not performance obligations as they do not transfer goods or services additional to the licence itself.

Satisfaction of performance obligations
     BC90            The Board observed that an entity would be required to apply the requirements of paragraphs 31–45 to determine whether the control of the non-IP licence (most commonly a right to perform) is transferred at a point in time or over time. The Board considered that some non-IP licences might be structured such that the licensor has the right to change the rights issued in the licence at any time (ie change the right to perform at any time), which may indicate that the licensee does not control the same licence over the term of the licence, and hence control is