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Chapter 4
Statement of financial position
2.1 Contract costs
An entity must capitalise:
the costs of obtaining a contract
the costs of fulfilling a contract that do not fall within the scope of another
standard (such as IAS 2 Inventories).
These capitalised costs are amortised to profit or loss as revenue is recognised.
2.2 Assets and liabilities
If the entity recognises revenue before it has received consideration then it should
recognise either:
a receivable if the right to consideration is unconditional, or
a contract asset.
A contract liability is recognised if the entity receives consideration before the
related revenue has been recognised.
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