paragraphs 99-104

BC309 The boards decided that an entity should amortise the asset recognised from the costs of obtaining and fulfilling a contract in accordance with the pattern of transfer of goods or services to which the asset relates. Respondents broadly agreed; however, some asked the boards to clarify whether those goods or services could relate to future contracts. Consequently, the boards clarified that in amortising the asset in accordance with the transfer of goods or services to which the asset relates, those goods or services could be provided under a specifically anticipated (ie future) contract. That conclusion is consistent with the notion of amortising an asset over its useful life and with other Standards. However, amortising the asset over a longer period than the initial contract would not be appropriate in situations in which an entity pays a commission on a contract renewal that is commensurate with the commission paid on the initial contract. In that case, the acquisition costs from the initial contract do not relate to the subsequent contract.