Why Should a Firm Be Cautious About Entering a Licensing

question 61

Essay

Why should a firm be cautious about entering a licensing agreement?

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Definitions:

Note Receivable

A financial asset representing a written promise for the future receipt of cash, indicating that one party owes another party a specific sum.

Settlement

The process of concluding a transaction or dispute by all parties involved agreeing to terms, often involving the payment of funds.

Promissory Notes

Written promises to pay a specified sum of money to a named party on demand or at a determined future date.

Carrying Amount

The book value of assets and liabilities reported on the balance sheet, calculated as the original cost less any depreciation, amortization, or impairment costs.