Capitalisation of an automated system in an energy producing company

[Kounta-kinte]

XYZ PLC is an energy company that produces electricity using fuel and gas . Last year , XYZ acquired an automation system (software ) that is expected to improve the quality of the production by reducing the amount of fuel losses during the course of the production . The automation system is expected to run on the 11 machines that produced the energy . So far it is only installed on 3 machines and it is operating normally on this 3 machines . My accounting concern is whether the automation system should remain as a WIP asset or it should be already classified as an intangible asset with a finite useful life . Obviously if classified as an intangible asset the depreciation should start on that automation system accordingly .
I would like to have an appropriate IAS 16 guidance on this issue .
Thank you guys and Happy new year

[JRSB]

Why is it WIP if you acquired it?
If it's available for use then you need to amortise.
Is there a set licence period when it's available?

[Marek Muc]

The judgement here is determining if the system meets the criteria of being "in the location and condition necessary for it to be capable of operating in the manner intended by management". If the system is functioning normally across three machines, this suggests it's ready for use and should be subject to amortisation. Given that it's an intangible asset, IAS 38 is the relevant standard here, not IAS 16. Specifically, you should refer to IAS 38.97.

[Kounta-kinte]

Thank you Marek for this contribution .
Yeah obviously it is IAS 38 not IAS !6