expense for digital licence

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daljeet
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Joined: 26 Jan 2021, 04:55

expense for digital licence

Post by daljeet »

Company incurred some expenses (technical staff costs and other expenses) solely for the purpose of bidding the digital bank licence. As the outcome of the bidding will be known next year, can the Compay capitalise this as prepayment at year end and then decide in following year based on : (to transfer to other asset -if successful, expense immediately -if unsuccessful)?
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Marek Muc
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Re: expense for digital licence

Post by Marek Muc »

isn't this banking licence fee just a tax levied by a government to be expensed in P&L anyway?
daljeet
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Joined: 26 Jan 2021, 04:55

Re: expense for digital licence

Post by daljeet »

The company will need to establish infrastructure for the digital platform. I am not sure that will be some form of intangible asset in future.
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Marek Muc
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Re: expense for digital licence

Post by Marek Muc »

Infrastructure is a tangible asset and yes - you can treat it as an asset as long as you consider the probability of future economic benefits to be >50%. As for the web software - check out SIC 32:
https://ifrscommunity.com/knowledge-bas ... site-costs
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