Is the transaction price a sales or usage-based royalty?

The guidance on sales-based or usage-based royalties applies if the royalty relates only to a license of intellectual property (“IP”), or if the license is the predominant item which the royalty relates. Revenue from the royalty should be recognized based on the sales- or usage-based requirements, or on the general criteria for variable consideration if it is embedded in another agreement and it is not the predominant item.ASC 606-10-55-65

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