Revenue – ifrs 15 handbook

Systematic amortisation for contract assets related to multiple 
performance obligations
The standard requires the asset to be amortised on a systematic basis (which 
might not be on a straight-line basis) that is consistent with the transfer to 
the customer of the goods or services to which the asset relates. When the 
contract contains multiple performance obligations satisfied at different points 
in time, the entity takes this into account when determining the appropriate 
amortisation period and pattern.

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190 | Revenue – IFRS 15 handbook
An entity may allocate a contract cost asset among the distinct goods or 
services to which it relates or it may amortise the contract cost asset using a 
single measure of progress considering all of the distinct goods or services to 
which the asset relates. 
If an entity chooses to allocate contract cost assets, then there may be multiple 
acceptable approaches to doing so. For example, an entity may allocate the 
contract cost asset on a relative stand-alone selling price basis. Alternatively, 
depending on the facts and circumstances, other approaches may be 
acceptable, including the following.
– Allocate the contract cost asset on the basis of the economic benefits (i.e. 
the margin) that the entity expects to obtain from transferring the good or 
service.
– When the entity determines that the contract cost asset relates specifically 
to one or more distinct goods or services in a contract, but not all, it may be 
reasonable to allocate the contract cost asset entirely to that (or those) goods 
or services.
If an entity uses the single measure of progress approach to amortise contract 
cost assets, then judgement may be required to determine a single measure 
of progress that is consistent with the transfer to the customer of the goods or 
services to which the contract relates.