Hello everyone,
This is quite an unusual question and would be grateful for everyone's thoughts.
I have a client, who paid a friend to develop a mobile app for android and ios store. The app is not the main business activity, but more, the app is a good offering which keeps current customers happy, and attracts new customers.
The client's friend is actually retiring very soon, and on speaking to many developers, our client has discovered that on average the app should have cost in the region of £10-£15k whereas he only paid £1k !
So, in a disaster scenario, the rebuild cost to bring it back to its former self would be huge.
Our client, being an accountant in the past, is adamant that a revaluation should take place, but I am not very comfortable with this, and mostly this is because none of my clients have ever had a mobile app before, so this is all new to me, and certainly apps never came up in my studies many moons ago!
Does anyone have any thoughts here?
Thanking you all.
Best regards,
Tim
Replies (4)
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What are you not comfortable with.
The principle of revaluing a fixed asset in the accounts of a company or business (which is it?)?
Or the amount of the valuation in question?