What is royalty | Types of royalty | accounting concepts
Welcome to Commerce Shruti! In this video, we will discuss Royalty and its types, an important topic in accounting.
What is Royalty?
Royalty is a payment made by a user (lessee) to the owner (lessor) for the right to use their assets, resources, or intellectual property. It is usually calculated as a percentage of revenue, production, or usage.
Types of Royalty:
Mining Royalty: Paid for extracting natural resources like coal, minerals, or oil.
Copyright Royalty: Paid to authors, composers, or publishers for using their creative works.
Patent Royalty: Paid to use patented technology, inventions, or processes.
Trademark Royalty: Paid for using brand names, logos, or trademarks.
This video covers the meaning of royalty, its importance in accounting, and practical examples to understand how royalties are calculated and recorded.
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