Royalty

The agreement identifies what can be used, by whom, for how long and in which territory or field. Payment may be linked to units, revenue, usage or a fixed amount, so a revenue percentage is not universal. A licence to use intellectual property does not necessarily transfer ownership. Forecast royalty cash flows using the actual contract and distinguish gross receipts from related costs, tax, withholding and currency effects where relevant. A cross-border intragroup royalty also raises pricing and legal questions that cannot be answered from the royalty label alone.