Capitalisation of ERP system

Capitalisation of ERP system

Didn't find your answer?

My company is implementing a new ERP system and the (eye-watering!) invoice for the whole shebang has landed on my desk. I understand that you can capitalise all costs associated with bringing an asset into use ie in this case installation, implementation and training costs. However, part of the initial cost includes the first year maintenance/support for the system - can I capitalise this also given that you can't buy the system without the support, or should this element be separated out into the P&L?

Any help would be gratefully received.

Kind regards
Margaret
Margaret McLean

Replies (1)

Please login or register to join the discussion.

avatar
By muamin101
11th Jun 2008 14:28

accrual basis
even if capitalised it has to be depriciated over the service period.

i would refer you to IAS 16 appendices

Thanks (0)