B Com 1 part Accountancy English Medium Dr

B. Com 1 part Accountancy English Medium Dr K K Choudhary Mob 9304111277

ROYALTY ACCOUNTS ROYALTY IS THE AMOUNT PAYABLE BY MUTUAL AGREEMENT AS A CONSIDERATION TO THE OWNER OF ASSET IN RETURN FOR THE USE OF SPECIAL RIGHT OF THAT ASSET The owner of property has special right on it. For example : Mineral Right on mines, patent right on production or sale of goods, copy right on publication of books. etc. To get these rights , some amounts are paid to the owner of property and this amount is called Royalty.

THE AMOUNT OF ROYALTY IS DETERMINED AT A FIXED RATE ON THE BASIS OF PRODUCTION OR SALE OR USE OF SPECIAL RIGHT OF ASSET. PARTIES OF CONTRACT OF ROYALTY LANDLORD LESSEE

TYPES OF ROYALTY Mining Royalty Copyright Royalty Patent Royalty Production Royalty Other Royalty

DIFFERENCE BETWEEN RENT AND ROYALTY RENT ROYALTY �It is the consideration payable to owner of a tangible asset for its use e. g. Land , Building, Machinery etc. �It is paid on the basis of certain period i. e. Per year, per month, per day etc. �The payment of Rent is always fixed. �In case of Rent there is no clause of minimum payment. � It is the consideration payable to owner of a tangible or intangible asset for the use of its special right. � It is paid on the basis of production or sale and calculated yearly or half yearly or quarterly. � The payment of Royalty varies as per sales or output. � In case of Royalty agreement there is a clause of making minimum payment.

THANKS DR K K CHOUDHARY