San Diego State University Performance Obligations Discussion Questions

I’m trying to study for my Accounting course and I need some help to understand this question.

Recently Johnson & Johnson, a big research-based pharmaceutical company, signs a contract with Moderna, a start-up biotech company and promises to

  1. Grant Moderna the exclusive rights to use Johnson & Johnson’s Technology Q for the life of its patent. This license gives Moderna the exclusive right to market, distribute, and manufacture Vaccine Q19 as developed using Technology Q. Johnson & Johnson views the patent as functional intellectual property.
  2. Assign two full-time employees to perform research and development work for Moderna in a specially designated Johnson & Johnson lab facility. The primary objective of these service is to get regulatory approval to market and distribute Vaccine Q19 using Technology Q.

Moderna is required to use Johnson & Johnson’s lab to perform the research and development service necessary to develop Vaccine Q19 using Technology Q, because the expertise related to Technology Q is proprietary to Johnson & Johnson and not available elsewhere.

Required Questions

  1. How many performance obligation(s) can you find in the contract?
  2. Explain your reasoning for each performance obligation
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