F1_Module 4 Income Recognition - part 2

Question 1

When are the incremental costs of obtaining a contract recognized as an asset (amortized) or an expense?

Answer 1

Incremental costs of obtaining a contract are costs that would not have been incurred if the contract had not been obtained. If the entity expects to recover these costs then it is capitalized and amortized. The entity will recognize an expense if it would have been incurred regardless of whether the contract was obtained or not..