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How to account for a component that was modified with a software that was developed internally?

When to recognize an intangible asset

asked Jul 27, 2015 in IAS 38 - Intangible Assets by Fusion01 Level 3 Member (5,690 points)

1 Answer

0 votes
The key question is whether to capitalize or expense. In case you opt to capitalize you need to see if such expenditure meets the recognition criteria given in IAS.16.7. That is:

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.

Otherwise you can recognize as an expense in the period it occurred.
answered Aug 8, 2015 by StaloneX Level 2 Member (2,800 points)