Buddy, holder of 100% of the working interest in an oil and gas lease, assigns a 1/8th overriding royalty interest to Abbey geologist in exchange for geological and geophysical work. Does Abbey have to recognize income associated with providing geological and geophysical services on receipt of the overriding royalty interest and if not, under what doctrine/theory can Abbey justify avoiding current income recognition?

Answer rating: 100% (QA)

No Abbey does not have to recognize income associated with providing geological and geophysical serv... View the full answer