Royalties are included in other business income accounts.

As mentioned in the corporate income tax regulations, royalty income refers to the right to use patents, non-patented technologies, trademark rights, copyrights and other franchises obtained by an enterprise to others. income. The provision here includes two situations, one is the transfer of ownership, and the other is the transfer of the right to use. However, in terms of accounting treatment, whether it is the transfer of ownership or use rights, the income obtained is treated as the company's sales revenue and recorded in the company's other business income.

If the contract or agreement stipulates that the usage fee shall be paid in one lump sum and no follow-up services will be provided, the sale of the asset shall be deemed to be completed in one go and the revenue shall be recognized in one go; if follow-up services are provided, the revenue shall be recognized in the contract , Revenue is recognized in installments within the validity period stipulated in the agreement; if the contract stipulates payment of usage fees in installments, revenue shall be recognized in installments according to the collection time and amount stipulated in the contract or the amount calculated by the charging method stipulated in the contract.

Royalty means:

Royalty refers to payment for the use of patents, trademarks, copyrights or similar proprietary rights owned by other economic units. It is a payment as property income, not a payment for commodity operations. Expenses incurred for the use of proprietary assets of other units can only be covered by property income derived from the use of such assets.

On the surface, the basis for review and judgment of royalties is only 2 points, but in fact, because of the different types of royalties, there are 10 points just to judge whether the royalties are related to goods. situation. Even if there are taxable royalties, there will still be issues related to whether the royalties are fully apportioned, how to apportion them, and how to calculate them.