CERTYNEX IFRS ACADEMY

The Ondelia platform acquires the streaming rights to a film catalogue for 10 years. Subscriptions are sold at variable prices depending on promotions, and the share of revenue attributable to the catalogue fluctuates widely with no link to the use of the rights. The contract sets no revenue cap. Management proposes to amortise the rights in line with subscription revenue. What do you conclude?

The presumption is not rebutted: use a method reflecting the consumption of the rights, the straight-line method if that pattern cannot be determined reliably.

The proposal is acceptable, since subscription revenue is generated by an activity that uses the rights.

The proposal is acceptable, because the rights can be regarded as expressed in revenue as soon as the platform tracks revenue by catalogue.

No amortisation should be recognised until the catalogue's revenue has stabilised.