When is the deferred part of the developers' fee payable?
- After the initial development period ends, the Enterprise will make available to the developers a development budget of at least the agreed proportion of gross profit. Requested development work always has a priority over payment of the deferred part of the development fees.
- In any month where requested development work is less than the agreed proportion of gross profit, deferred fees will make up the difference. For example:
- If there were
- £10,000 of deferred fees
- £3,000 of gross profit for the month
- An agreed minimum of 30% gross profit for on-going development
- That would give £900 development budget for the month.
- If £500 of development work was requested
- £400 would be payable from deferred fees
- £9,600 of deferred fees would be carried forward.
- There is no time limit for starting or completing repayment, and no interest is payable. If gross profit were always zero (that would be very unfortunate, but for the sake of example) the deferred fees would never become due.
