QUESTION 54 Illustration 54: Amortization An entity enters into a service contract with a customer and incurs incremental costs to obtain the contract and costs to fulfil the contract. These costs are capitalized as assets in accordance with IFRS 15. The initial term of the contract is five years but it can be renewed for subsequent one-year periods up to a maximum of 10 years. The average contract term for similar contracts entered into by entity is seven years. Determine appropriate method of amortization.