CERTYNEX IFRS ACADEMY

Fournil d'Or, a bakery chain, grants a franchisee the right to operate under its brand for five years and in a single region, in exchange for a fixed initial fee. As it customarily does, Fournil d'Or will continue to run advertising campaigns, develop its recipes and manage the brand image. The value of the brand to the franchisee substantially depends on these activities, which directly expose it to their effects without transferring any good or service to it (case data). The licence is distinct. How is the initial fee recognised?

In full on grant, as a right to use the brand as it exists at that date.

Over time over the term of the franchise, as a right to access, using an appropriate measure of progress.

In full on grant, because limiting the franchise to five years and a single region shows that the franchisee only obtains the brand as it exists at the grant date.

When the franchise expires, once all of Fournil d'Or's activities have been performed.