Question
There are seven indicators that help us to determine whether contracts should be combined and evaluated as a single multiple-deliverable arrangement. Identify the indicators that
There are seven indicators that help us to determine whether contracts should be combined and evaluated as a single multiple-deliverable arrangement. Identify the indicators that are presented in the case below and determine whether the contracts should be combined and accounted for as a single multiple-element arrangement? (10 pts)
Company R owns the rights to a proprietary chemical compound used to make various products. It licenses the right to use the compound in a particular product line to a customer for three years, which is the remaining life of the patent on the compound. However, Company R does not provide the customer with a license to manufacture the proprietary compound or have it manufacturedCompany R maintains those rights exclusively until the patent expires. The customer will be responsible for developing the product and marketing it. An initial payment under the license is due at signing, with further payments due ratably over the term of the license. In a separate contract, contemplated at the time of the license, but negotiated and signed three months later, Company R agrees to supply the chemical compound to this customer at market prices for three years.
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