LET’S TALK ABOUT ROLAYTIES IN ACCOUNTING
Royalty arrangements are designede
to benefit both the seller and the buyer
of intellectual property rights,giving opportunity for the one party to
increase its market share or expand into a new market, while the other party
diversifies its product range and gains
access to specific services or goods difficult
to produce on its own.Royalties
are common I the publishing industry because publisher often do not employ
writers and instead prefer to work with independent authors.Other
example of royalty related industries include (but are not limited to):
·
Music industry,
where artists earn their rolayties from the sale of the music works opn CDs or online.
·
Broadcasting
media, where game producers usually receive rolayties for additional sales of
their newly developed video games if they meet certain revenue targets.
·
Mobile
application industry, where mobile operators get rolayties for selling third
party apps in their virtual stores.
·
Film industry,
where there are such royalty players as actors, producers, writers of scripts
etc.
·
Mineral
resources industry,where companies usually pay landowners some royalty rate for
the right to extract natural resources, such as petroleum, natural gas, silver and other.
·
Other
industries,where royalties are paid to designers, sport teams and celebrities
for right to use their logo trademark on promotional materials, clothes or commodities.
The
way royalties are determined highly depends on the industry.Sometimeslicense
contracts stipulate royalties as percentage of net income, and sometimes royalties depend upon the number of
items used or sold. Also, it is common to make
upfront payment for future royalties.For instance, if a book generates more
royalties than the advance royalties than the advance royalty payment to the
author, then additional royalty amounts are to be paid;however, if it is not
the case, then the advance is generally not Refundable by the author.
Tidak ada komentar:
Posting Komentar