Revenue – ifrs 15 handbook

Entities need to consider costs vs benefits of portfolio approach
Although the portfolio approach may be more cost effective than applying the 
standard on an individual contract basis, it is not clear how much effort may be 
needed to:
– evaluate which similar characteristics constitute a portfolio: e.g. the effect of 
different offerings, periods of time or geographic locations; 
– assess when the portfolio approach may be appropriate; and
– develop the process and controls needed to account for the portfolio.
No specific guidance on assessing whether portfolio approach 
can be used
IFRS 15.IE110–IE115, IE267–IE270
The portfolio approach can be applied to both contract revenues and costs. 
The standard includes illustrative examples in which the portfolio approach 
is applied, including for rights of return and breakage. However, it does not 
provide specific guidance on how an entity should assess whether the results 
of a portfolio approach would differ materially from applying the standard on a 
contract-by-contract basis.

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7 Contract costs | 173
7.1 Costs of obtaining a contract
| 
7 
Contract costs
Overview
The standard does not seek to provide comprehensive guidance on the 
accounting for contract costs. In many cases, entities apply the cost guidance 
under other standards – e.g. the inventory standard. However, the revenue 
standard does include specific guidance on the following areas.
Costs of fulfilling a contract
(see
7.2)
Section
Amortisation of assets
arising from costs to obtain
or fulfil a contract
(see
7.3)