Logistics provider Logifret enters into a 6-year warehousing contract with a retailer. To prepare its warehouses, it incurs: set-up labour 26,000; consumables used directly for the set-up 7,000; an insurance premium taken out for this contract only 3,000; purchase of racking, property, plant and equipment accounted for under IAS 16, 30,000; non-chargeable overheads 8,000. The set-up transfers no service to the customer, creates resources used for future services and its cost is recoverable (facts of the case). What amount does Logifret recognise as an asset for costs to fulfil the contract under IFRS 15?
- Set-up labour
- 26,000
- Direct consumables
- 7,000
- Contract-specific insurance
- 3,000
- Racking (IAS 16)
- 30,000
- Non-chargeable overheads
- 8,000