Expensed Costs of a Contract

[ImBruces]

A company previously expensed the incremental costs of obtaining a contract.
All else being equal, adopting the May 2014 IASB and FASB converged accounting
standards on revenue recognition makes the company’s profitability initially
appear:
A lower.
B unchanged.
C higher

What is expensing the incremental costs of obtaining a contract? Can someone explain me? I don`t know what the question is trying to say.

If possible also give me a example of a contract on the BS and IS.

[S2000magician]

Long term contract assets and liabilties

I find this information in Schweser notes book with no more explanation/example Neither the curriculum. “A final notable change to the standards for accounting for a long-term contract is that the costs to secure the contract and certain other costs must be capitalized; that is, they are put on the balance sheet as an asset. The effect of capitalizing these expenses is to decrease reported expenses on the income statement, increasing reported profitability during the contract period.” Anyone c…