Professional Accounting Research W1

Research Questions

1. How should accountants recognize revenue from contracts whose existing rights have been extended?

a. It should be recognized based on the first arrangement

b. It should be recognized by expanding Reword this sentence

c.

1. How should accountants recognize revenue from contracts modified by adding rights?

a. They should consider the effect of the rights on the initial contract and include it in the contract?

b. The additional rights should not influence revenue recognition

c.

1.  An IP permitting sell the sale of products in the U.S during the period of a license is an attribute of the license hence, it does not affect the number of obligations. , supposing If the restrictions are expanded, would it amount to additional attributes of the license?

a. It should not be regarded as additional attributes but as part of the original attributes

b. The additional attributes influence the obligations; therefore, they should be regarded as such

c.

1.  What would be the ideal way of recognizing royalties arising from the usage of the license of IP?

a. It should be as revenue from the license when it directly relates to the IP

b. It should be recognized independently as royalties when the IP is the predominant element of the contract

1. What considerations should be made to make license revenue predominant? I don’t understand this question. Re word.

a. When the organization places more value on to royalties than to on licensing?e

b. When the organization places more value toon goods and services linked to the IP

c. When the cost of the license if higher than the number of royalties

1. Should revenue from contracts be recognized by subsequent modification or from inception?

a. It should be recognized at inception

b. It should be recognized at subsequent modification

2.  In the case of software license converted to a software as a service arrangement, should is such revenue be recognized as license fees or as sales of services

a. It is recognized as license fees

b. It should be recognized as sales because the service is offered different organizations

1.  In a situation of IP associated with production of goods such as drugs, should revenue be recognized when the IP is transferred or when the production of goods begin

a. When the production of products begin

b. When the IP is transferred to the client

1. To what extent should performance obligations influence revenue recognition

a. Performance obligations determine the type of contract; whether it is functional or symbolic hence determine when revenue is recognized

b. There is no effect of performance obligations on recognition of revenue

10. What considerations are relevant to the determination of the accounting model to apply to contract modification arrangement?

a. The sale of IP rights,

b. The license of IP rights,

c. The sale of IP rights together with other inputs and processes that meet the definition of a business

d. All the above