As it has been described in my previous post, IAS 38 permits recognition of internally created intangible assets to the extent the expenditures can be analogized to the development phase of a research and development program, including cost incurred in computer software developments for internal use.
“Are all of the computer software costs allowed to be capitalized—and recognized as internally generated intangible? And, what are the recognition principles?” You may ask.
As long as they meets the recognition criteria, the cost is determined using the same principles as for an acquired tangible asset. Thus, cost comprises all costs directly attributable to creating, producing, and preparing the asset for its intended use (read my previous post). The recognition of computer software costs poses several questions:
