Revenue – ifrs 15 handbook

Item
Similar in nature to…
Classification
Asset arising from 
costs to obtain a 
contract
Intangible assets
Non-current in its 
entirety
Asset arising from 
costs to fulfil a 
contract
Inventory
Current in its entirety
Contract asset
Trade receivables
Current and non-
current – split
Contract liabilities
Other operating liabilities
Current in its entirety
Contract liabilities
Long-term borrowings
Current and non-
current – split
If an entity classifies an asset or a liability as current, but does not expect 
to realise or settle it within the 12 months after the reporting period, then 
it discloses the amount expected to be realised or settled after more than 
12 months, as required by the presentation standard. 
For detailed illustrations, see Examples 
4
–
7B
 in this chapter.
Presentation of costs to obtain and costs to fulfil a contract in the 
statement of financial position
IAS 1.29–30A, 55, 58–59, 77, IFRS 15.110
Neither the revenue nor the presentation standard provides specific guidance 
on the presentation of assets arising from the costs to obtain and costs to fulfil 
a contract. An entity applies judgement, based on considerations of materiality, 
in determining whether these items should be presented separately in the 
statement of financial position or can be aggregated with other items and 
disclosed in the notes. In doing so, an entity assesses:
– the nature and liquidity of assets;
– the function of assets within the entity; and
– the measurement basis of the item. 
An entity cannot aggregate material items that have a different nature or 
function.

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304 | Revenue – IFRS 15 handbook
If an entity determines on the basis of materiality considerations that contract 
costs do not warrant separate presentation in the statement of financial 
position, then it considers whether there is another line item(s) with which 
it would be appropriate to aggregate them. The key factor in this analysis is 
the nature of items being considered for aggregation. For example, in some 
cases costs to obtain a contract may be similar in nature to an intangible asset 
– e.g. customer relationship. This is because those costs are amortised over a 
period beyond the existing contract term taking into account future anticipated 
contracts. Conversely, costs to fulfil a contract may be similar in nature to 
prepaid operating costs or work in progress – i.e. inventory.
The nature of costs to obtain or costs to fulfil a contract may differ under 
different contracts and an entity needs to consider all facts and circumstances 
in determining the nature of the item.