license

Examples of license in the following topics:

• Franchises and Licenses

  • A common example of a license a business might purchase is for software.
  • The same rules apply to a license.
  • If a business must pay licensing fees on a monthly or on an annual basis that coincides with the end of the business's fiscal year, the business does not record a license asset.
  • The fees that the business paid for those licenses are included as an expense.
  • If the license is for multiple years or accounting periods and is acquired by paying an initial fee, the license is recorded as an asset on the balance sheet and its value equals what it cost to acquire the license.

• Defining Liabilities

  • An example of a deferred revenue account is an annual software license fee received on January 1 and earned over the course of a year.

• Current Guidelines for Revenue Recognition

  • Revenue from the use of the company's assets such as interest earned for money loaned out, rent for using fixed assets, and royalties for using intangible assets, such as a licensed trademark.

• Operating Expenses, Non-Operating Expenses, and Net Income

• Reporting Intangibles

  • The most common types of intangibles are patents, copyrights, franchises or licenses, trademarks or trade names, and goodwill.

• Patents

  • A patent is a legal license granting its holder the exclusive right to make, use, or sell a specific invention.

• Standard-Setting Groups: SEC, AICPA, and FASB

  • The SEC was given the power to license and regulate stock exchanges, the companies whose securities were traded on exchanges, and the brokers and dealers who conducted the trading.