Licensing (paragraphs B52-B63B) (paras. BC402-BC421J)
[Clarifications to IFRS 15 issued in April 2016 deleted paragraph B57 and added paragraph B59A of IFRS 15 to clarify the application guidance on determining the nature of the entity's promise in granting a licence of intellectual property. Paragraphs BC402-BC414 should therefore be read together with paragraphs BC414A-BC414Y, which explain the IASB's considerations in amending the application guidance.]
BC402 In the 2011 Exposure Draft, the boards proposed that a licence grants a customer a right to use, but not own, intellectual property of the entity. Consequently, the 2011 Exposure Draft viewed the nature of the promised asset in a licence as a right to use an intangible asset that is transferred at a point in time. This is because the boards' view at that time was that there is a point at which the customer obtains the ability to direct the use of, and obtain substantially all of the benefits from, the right to use the intellectual property. However, the 2011 Exposure Draft also explained that revenue may be recognised over time for some contracts that include a licence if that licence is not distinct from other promises in the contract that may transfer to the customer over time.