Licensing Revenue

Posted in Finance, Accounting and Economics Terms, Total Reads: 373

Definition: Licensing Revenue

It is the income earned by a company by allowing its own patented material to be used by some other entity such as an individual, institution or other corporation.

For example, android platform of Google allows it to earn licensing income from companies like Samsung, Motorola by allowing them to sell their smartphones based on android OS.

Licensing is a significant source of revenue for sports teams such as merchandise sales by Kolkata Knight Riders and selling of television rights by BCCI. Licenses are often over a period of time and the company which pays for a license records it as an expense in the income statement whereas the same is recorded as an asset in balance sheet of company lending the license.



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