License Fee

A fee payable in a fixed amount for a license, as opposed to a Royalty, especially a Running Royalty, which is typically on a percentage of sales value or per unit basis. License fees may be found in licenses that bear a royalty, or can be the payment made in a Paid-Up license. For a licensee one advantage of a license fee is that it usually can allow the license to be treated as an asset on the company balance sheet as opposed to running royalties which must be treated as an expense. See Certainty/Uncertainty Trade-off.

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