IFRS 15 : Capitalisation of Contract Cost

[vikasrrpatel82]

Hi All,

My name is Vikas Patel, I am based in India and working with one IT company. I am a Qualified Chartered Accountant having 11+ year of experience in multiple domain.

I want to discuss on the above mention topic i.e. IFRS 15 : Capitalisation of Contract Cost. If any one from the Forum can guide on the application of mentioned subject in IT industry, I believe the Commission to the salesperson is the cost generally covers in the contract cost.

Regards
Vikas

[Marek Muc]

Hi, the guidance is already included in the knowledge base:
https://ifrscommunity.com/knowledge-ba ... a-contract

can you be more specific with you question?

[vikasrrpatel82]

Hi Marek,

Thanks for your revert.

The provided guidance is very generic, I am interested more on the used case studies which IT industry can be used as benchmarks. For ex: Sales commission allocation basis on Net revenue rate then in this case how the commission cost to allocate on customer contract as well the deciding factor for amortization period.

If any company's financials can be refer to take the basis of capitalization of cost and its amortization.

Thanks
Vikas

[Marek Muc]

why do you need to allocate commissions to contracts? If they are incremental, aren't they specifically linked to a contract?