Revenue – ifrs 15 handbook

Example 13A – Licence of IP: Hold-back period
On 1 January Year 1, Film Studio F enters into a three-year contract to grant 
Broadcaster B the exclusive right to air Film M in the US and Canada during 
the contract term. B has the right to air M in the US immediately but, due 
to an overlapping contract with a Canadian competitor, the rights to air the 
film in Canada do not begin until 1 July Year 1 – i.e. there is a six-month hold-
back period.
F considers whether the contract grants B a single licence that is subject to a 
use restriction (i.e. a single licence to show the film in the US from 1 January 
Year 1 and in Canada from 1 July Year 1), or two licences (i.e. one licence to 
show the film in the US and one licence to show the film in Canada). 
F determines that the contract includes two promised licences based on 
the following:
– the term of the contract preventing B from airing the film in Canada for the 
first six months of the contract term leads to the rights to show the film in 
Canada being a separate and additional right transferred on 1 July Year 1; and
– B does not control the additional right at 1 January Year 1 because it cannot 
use and benefit from it in Canada before 1 July Year 1. This differentiates it 
from the right to show the film in the US. 
Therefore, the right to air the film in Canada represents a separate promise that 
F has not yet transferred to B.

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224 | Revenue – IFRS 15 handbook
Example 13B – Licence of IP: Usage limitations
Modifying Example 13A, the rights to air Film M in the US and Canada both start 
on 1 January Year 1. However, the terms of B’s rights to air the film extend only 
to eight broadcasts in each territory during the three-year period and, as part of 
the contract, B agrees not to air certain types of adverts during the film.
In this case, F determines that the contract is for a single licence because B can 
begin to use and benefit from the rights conveyed in both the US and Canada 
from 1 January Year 1. There are no additional rights transferred after 1 January 
Year 1.
The term of the licence (three years), the geographic scope of the licence 
(B’s US and Canadian networks only) and the usage limitations (limited to 
eight showings per territory and restrictions on adverts during the film) are all 
attributes of the licence.