(Skye Co – Q4(b)(ii) Mar & Jun 2017)

Hi sir,

For the variable compensation amount (0.5%) related to past usage of the IP rights but is calculated based on future sales (uncertain future event), can I argue that such payment is a contingent liability because the payment is based upon on the occurrence of future sales, therefore should be disclosed in the notes, rather than recognising it as a financial liability as per suggested answer?

Hope you could help to clarify this, thank you! 🙂