IAS38 - Intangible assets
Posted: 29 Jun 2022, 23:18
Evening,
Please be gentle with me as this is my first post to the forum and I'm not an accountant.
I work in the IT department for a UK non departmental public body (arms length from government) and we are towards the end of an external audit. We are currently developing a new internal IT system using the agile development methodology meaning the system is incrementally improved until it meets the initial business requirements.
Now our internal position on this is that we can't amortise this software as we still consider it an Asset Under Construction and only when the initial requirements have been delivered will it move to an Asset in Use and amortised. Looking at IAS38, the guidance is very open to interpretation and we feel that we have interpreted it in a sensible way however, the auditors do not agree.
What is the opinion on this forum and what have people done in practice of when to start the amortisation of software developed using the agile methodology.
Apologies for my clumsy question and thank you in advance for any advice you may be able to provide.
Regards,
Dave
Please be gentle with me as this is my first post to the forum and I'm not an accountant.
I work in the IT department for a UK non departmental public body (arms length from government) and we are towards the end of an external audit. We are currently developing a new internal IT system using the agile development methodology meaning the system is incrementally improved until it meets the initial business requirements.
Now our internal position on this is that we can't amortise this software as we still consider it an Asset Under Construction and only when the initial requirements have been delivered will it move to an Asset in Use and amortised. Looking at IAS38, the guidance is very open to interpretation and we feel that we have interpreted it in a sensible way however, the auditors do not agree.
What is the opinion on this forum and what have people done in practice of when to start the amortisation of software developed using the agile methodology.
Apologies for my clumsy question and thank you in advance for any advice you may be able to provide.
Regards,
Dave