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Sale of license – Accounting Standards

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Sale of license – Accounting Standards

  • This topic has 1 reply, 2 voices, and was last updated 10 months ago by Stephen Widberg.
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  • Author
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  • November 7, 2022 at 11:09 am #670834
    bucky709
    Participant
    • Topics: 19
    • Replies: 14
    • ☆

    In the Sep/Dec 21 Q2.Agency Group question, part b asks us to discuss how the sale of the license should be accounted for.

    I am a bit confused regarding what accounting standard to apply in that scenario. I applied ifrs 15 Revenue to the scenario ,treating it as licensing of property. However in the answer key they have derecognized the property and recognized a gain .

    I think my answer would be incorrect as the transaction is a “sale of an intangible asset” and therefore would not fall under ifrs 15.
    Can you tell me whether this is correct?

    And I don’t understand why they have used both the standards to answer the question.Can someone provide an explanation.

    thankyou

    November 8, 2022 at 12:35 pm #670978
    Stephen Widberg
    Keymaster
    • Topics: 15
    • Replies: 3075
    • ☆☆☆☆☆

    Imagine that you are a supermarket:

    – Buy and sell rice = IFRS 15
    – Buy and sell shelving = PPE = NOT IFRS 15 – it’s a sale of a non-current asset.

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