Revaluing A Mobile App

Revaluing A Mobile App

Didn't find your answer?

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)

Please login or register to join the discussion.

By johngroganjga
26th Jul 2016 11:02

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?

Thanks (0)
Replying to johngroganjga:
avatar
By MrK2016
26th Jul 2016 11:09

Mostly, its because I am in the minority and not particularly technology minded and not au fait with apps at all !!

Thanks (0)
Replying to MrK2016:
By johngroganjga
26th Jul 2016 11:21

But what is the answer to my question?

Thanks (0)
Replying to johngroganjga:
avatar
By MrK2016
26th Jul 2016 11:28

johngroganjga wrote:

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?


It is a company.
It is your latter question causing the confusion.
Thank you
Thanks (0)