Telecommunications

CAC Capitalized as Contract Cost (IFRS 15)

Capitalizing incremental commission costs to obtain a contract customer.

Account NameTypeDebit ($)Credit ($)
Contract Costs — CAC AssetAsset (+)35.00-
Commission Expense (Deferred)Expense (-)-35.00

💡 Accountant's Note

Under IFRS 15, incremental costs to obtain a contract are capitalized if recoverable. For a 24-month postpaid contract, the JOD 35 dealer commission is capitalized and amortized over the 24-month contract term.

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