IAS-38: Recognition of Android Application

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arif.asif
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IAS-38: Recognition of Android Application

Post by arif.asif »

Hello Everyone
I am working in a Tech company whose principal line of business is e-commerce B2B Business basically it sell trading day to day products to retailer through its online platform, for this the entity has internally generated two android applications and one cloud based database which are namely;
- Customer app (this is front end UI for customers to place their orders)
- Logistics app (this is an application for riders to track their deliveries)
- Backend Portal (known as Hyper)
My Question is that whether these applications should be recognized as intangibles? as these are generating economic inflows for the entity
and if these are recognized then the only related cost are the payroll cost of those employees who are developing these applications so it would not be possible to separately identity the cost of each application so can we recognize these three applications as a whole?
JRSB
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Re: IAS-38: Recognition of Android Application

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arif.asif
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Re: IAS-38: Recognition of Android Application

Post by arif.asif »

I have already tested this criteria. The only problem is I cannot separate the cost of each application but i can record this as a whole or one if its possible?
JRSB
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Re: IAS-38: Recognition of Android Application

Post by JRSB »

ok you didn't meet the last criteria to be able to measure reliably the costs then
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Marek Muc
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Re: IAS-38: Recognition of Android Application

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JRSB has raised a valid point!
Leo
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Re: IAS-38: Recognition of Android Application

Post by Leo »

If the overall costs can be measured reliably (based on timesheets filled in by each employee working on the projects, validated by the supervisor etc.), could it be capitalised as a whole or expensed cause it cannot be separated by app.
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Marek Muc
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Re: IAS-38: Recognition of Android Application

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But these seem to be different assets
arif.asif
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Re: IAS-38: Recognition of Android Application

Post by arif.asif »

Yes these are three different apps but i cannot separate the payroll cost reliably over all these apps but i can record this as a whole if its possible
JRSB
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Re: IAS-38: Recognition of Android Application

Post by JRSB »

Sounds like they generate distinct/separate cashflows though?
arif.asif
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Re: IAS-38: Recognition of Android Application

Post by arif.asif »

No they are interlinked
Leo
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Re: IAS-38: Recognition of Android Application

Post by Leo »

Maybe try to present it as one single intangible asset, and see how it goes with the auditors.
JRSB
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Re: IAS-38: Recognition of Android Application

Post by JRSB »

yes probably depends on how these sit in the content/materiality of the wider balance sheet, presumably all in the same CGU etc but even so if these were the only assets there most likely they' need a separation.
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Marek Muc
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Re: IAS-38: Recognition of Android Application

Post by Marek Muc »

well it's not only the issue of presentation within SoFP, but SoFP vs P&L actually
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