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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Deferred income on performance obligation
Hi Sir,
If I sold a license which lasts for 5 years and no other goods/services were included, can the performance obligation be performed at that point in time and thus there won’t be any deferred income? Or it still has to be deferred for a period of 5 years?
Absolutely! If there is no outstanding performance obligation it MUST be recognised in full!
(That the user of the licence will amortise it over 5 years is irrelevant to the company that granted the licence.)