Revenue – ifrs 15 handbook

7.4 Impairment
IFRS 15.101
An entity recognises an impairment loss to the extent that the carrying amount of 
the asset exceeds the recoverable amount. The ‘recoverable amount’ is defined as 
the:
– remaining expected amount of consideration to be received in exchange for the 
goods or services to which the asset relates; 
less
– costs that relate directly to providing those goods or services and that have not 
been recognised as expenses.
IFRS 15.102
When assessing an asset for impairment, the amount of consideration included in 
the impairment test is based on an estimate of the amounts that the entity expects 
to receive. To estimate this amount, the entity uses the principles for determining 
the transaction price, with two key differences:
– it does not constrain its estimate of variable consideration: i.e. it includes its 
estimate of variable consideration, regardless of whether the inclusion of this 
amount could result in a significant revenue reversal if it is adjusted; and
– it adjusts the amount to reflect the effects of the customer’s credit risk.
Impairment model specifically for capitalised contract costs
IAS 2, 36
The standard includes an impairment model that applies specifically to assets 
that are recognised for the costs to obtain and/or fulfil a contract. An entity 
applies this model in addition to the impairment models in other standards – 
e.g. the inventory standard and the impairment standard.
IAS 36.22, IFRS 15.103
The entity applies, in the following order: 
– any existing asset-specific impairment guidance (e.g. for inventory);
– the impairment guidance on contract costs under the standard; and 
– the impairment model for cash-generating units.

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7 Contract costs | 193
7.4 Impairment
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For example, if an entity recognises an impairment loss under the standard, 
then it is still required to include the impaired amount of the asset in the 
carrying amount of the relevant cash-generating unit if it also performs an 
impairment test under the impairment standard.