BC312 A 'learning curve' is the effect of efficiencies realised over time when an entity's costs of performing a task (or producing a unit) decline in relation to how many times the entity performs that task (or produces that unit). The phenomenon of a learning curve can exist independently of a contract with a customer. For example, a typical manufacturer that produces units of inventory would become more efficient in its production process over time. Some respondents asked how to apply the proposals to account for the effects of learning costs in a contract with a customer.
BC313 The boards noted that IFRS 15 addresses the accounting for the effects of learning costs if both of the following conditions are satisfied:
(a) an entity has a single performance obligation to deliver a specified number of units; and
(b) the performance obligation is satisfied over time.
BC314 In that situation, an entity recognises revenue by selecting a method of measuring progress that depicts the transfe
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