The Fremont (Ireland) Flyers were a semi-professional carriage racing team that competed up until the early 1930's. Mary Smith owns the Fremont Fliers' trademark, and recently licensed it to the Fremont (California) Flyers roller derby team. The license allows the roller derby team to use the trademark for five years for a total of $15,000.
-Under IFRS, how much revenue would Mary recognize in year 1 of the license?

Question

The Fremont (Ireland) Flyers were a semi-professional carriage racing team that competed up until the early 1930's. Mary Smith owns the Fremont Fliers' trademark, and recently licensed it to the Fremont (California) Flyers roller derby team. The license allows the roller derby team to use the trademark for five years for a total of $15,000. 
-Under IFRS, how much revenue would Mary recognize in year 1 of the license?

Quizplus · Accepted Answer

Even though a trademark is symbolic intellectual property, IFRS requires the seller to focus on whether the seller is providing continuing service over the license period. Given that the old Fremont Flyers have not operated in almost 100 years, there are no ongoing activities associated with the trademark, so IFRS would view the license as conveying a right of use and recognize all $15,000 in the first year of the license.

The Fremont (Ireland) Flyers Were a Semi-Professional Carriage Racing Team