Revenue – ifrs 15 handbook

Contract assets and contract liabilities for multiple contracts are 
not netted
IFRS 15.BC317–BC318
A single contract is presented either as a net contract asset or as a net contract 
liability. However, if an entity has multiple contracts, then it cannot present on 
a net basis contract assets and contract liabilities of unrelated contracts (i.e. 
contracts that cannot be combined under Step 1). Therefore, it presents total 
net contract assets separately from total net contract liabilities, rather than a net 
position on all contracts with customers.
IFRS 15.BC301
An asset arising from the costs of obtaining a contract is presented separately 
from the contract asset or liability.
IFRS 15.BC320–BC321
The standard does not specify whether an entity is required to present its 
contract assets and contract liabilities as separate line items in the statement 
of financial position or whether it can aggregate them with other items in the 
statement of financial position – e.g. include contract assets in an ‘other assets’ 
balance. Therefore, an entity applies the general principles for the presentation 
of financial statements and the offsetting requirements.
Impairment assessment of contract assets for contracts with 
multiple performance obligations
IFRS 15.107, 113(b), BC317
To assess a contract asset for impairment, an entity applies the requirements in 
the financial instruments standard and uses the expected credit loss method. 
There is limited guidance on how to perform the impairment assessment of 
contract assets. For contracts with multiple performance obligations, a question 
arises over whether the impairment assessment should be performed at the 
contract level or the performance obligation level.
It appears that for contracts with multiple performance obligations an entity 
should perform the impairment assessment of contract assets at the contract 
level. This is because the net contract asset/liability position best represents the 
entity’s real exposure to the credit risk of its customer.