| Unearned Revenue [Text Block] |
|
9.
|
Unearned Revenue
|
| |
|
| |
On May 14, 2016, the Company entered into a licensing agreement (the “Licensing Agreement”) with an arm’s length party (the “Licensee”) allowing the Licensee, for a two-year period, to utilize the Company’s Technology to create, test, manufacture, and sell marijuana-infused consumable and/or topical products, in the state of Colorado, with an option of extending the terms of the Licensing Agreement to Washington, Oregon, and California (the “Territorial License”). In addition to the granting of the license, the Company is required to provide support services to the Licensee in connection with the use of the Company’s Technology during the term of the Licensing Agreement.
|
| |
|
| |
The Company determined that the provision of the support services is a separate deliverable under the Licensing Agreement. As the support services will not be sold on a stand-alone basis, the Company is unable to establish a vendor-specific objective evidence of fair value of such services to be able to objectively allocate the Territorial License fee receipts between the license and the support services. Accordingly, the Company recognizes revenue ratably over the term of the Licensing Agreement. As of August 31, 2017, the Company had received the full $50,000
of the Territory License Fee. During the year ended August 31, 2017, $25,417
was recognized as revenue (Note 13) with the remaining $17,083
deferred for recognition in future periods.
|
| |
|
|
August 31 |
|
|
August 31 |
|
| |
|
|
2017 |
|
|
2016 |
|
| |
|
|
$ |
|
|
$ |
|
| |
Balance – Beginning |
|
12,500
|
|
|
-
|
|
| |
Territorial License fees received/receivable (Note 6) |
|
30,000
|
|
|
20,000
|
|
| |
Advance payments on product sales |
|
4,900
|
|
|
-
|
|
| |
Earned revenue (Note 13) |
|
(30,317
|
) |
|
(7,500
|
) |
| |
Balance – Ending |
|
17,083
|
|
|
12,500
|
|
|
|
9.
|
Unearned Revenue
|
| |
|
| |
On May 14, 2016, the Company entered into a licensing agreement (the “Licensing Agreement”) with an arm’s length party (the “Licensee”) allowing the Licensee, for a two-year period, to utilize the Company’s Technology to create, test, manufacture, and sell marijuana-infused consumable and/or topical products, in the state of Colorado, with an option of extending the terms of the Licensing Agreement to Washington, Oregon, and California (the “Territorial License”). In addition to the granting of the license, the Company is required to provide support services to the Licensee in connection with the use of the Company’s Technology during the term of the Licensing Agreement.
|
| |
|
| |
The Company determined that the provision of the support services is a separate deliverable under the Licensing Agreement. As the support services will not be sold on a stand-alone basis, the Company is unable to establish a vendor-specific objective evidence of fair value of such services to be able to objectively allocate the Territory License fee receipts between the license and the support services. Accordingly, the Company recognizes revenue ratably over the term of the Licensing Agreement. As of August 31, 2016, the Company received $10,000
as first installment of the Territory License Fee and recorded as receivable of a further $10,000
for its second installment, which was received subsequent to the year-end. During the year ended August 31, 2016, $7,500
was recognized as revenue with the remaining $12,500
deferred for recognition in future periods.
|
|