Four Seasons Music decided to license the music of one of its artists, Jonnie Valley, to radio stations throughout Europe. For each song played, the radio stations contracted to give Four Seasons a royalty of €0.50. This licensing agreement qualifies as a financial instrument.

Question

Quizplus · Accepted Answer

The licensing agreement qualifies as a financial instrument because it represents a contractual right to receive cash (royalties) from the radio stations in exchange for the use of the intellectual property (music).

Four Seasons Music Decided to License the Music of One