IFRS 15Chapter 8Lesson 1
Costs to obtain and to fulfil a contract
Step 1 of 8Learning objectives
Go deeper+3 deeper insights · +1 calculation · +1 point of attention
Some costs incurred to win or to perform a contract are not immediate expenses: recoverable incremental costs of obtaining a contract and costs to fulfil that meet three conditions form a contract cost asset, amortised as the goods or services are transferred, impaired when the remaining consideration no longer covers its carrying amount, and possibly reversed within a precise limit.
30 minNot started
Learning objectives
- Distinguish an incremental cost of obtaining a contract from a cost incurred anyway, and apply the one-year practical expedient.
- Determine whether a cost to fulfil a contract falls under another standard, forms a contract cost asset (three conditions) or is an expense.
- Calculate the amortisation of the contract cost asset, consistently with the transfer of the goods or services.
- Calculate an impairment loss and its capped reversal, then record the related entries.