Capitalisation of Intangibles
Definition
The accounting practice of recording an intangible expenditure as an asset on the balance sheet rather than expensing it immediately through the income statement. Under IAS 38, development costs may be capitalised when specific recognition criteria are met, whereas research costs must always be expensed.
Related Terms
Related FAQ
How should companies capitalise AI investments under IAS 38?
Under IAS 38, AI development costs can be capitalised once technical feasibility, intent to complete, probable future benefits, and reliable cost measurement are demonstrated — research phase costs must be expensed.
Read full answer →What are the ASC 350 rules for software capitalisation?
ASC 350-40 requires capitalisation of internal-use software development costs during the application development stage, while preliminary project and post-implementation costs must be expensed.
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