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)
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accrual basis
even if capitalised it has to be depriciated over the service period.
i would refer you to IAS 16 appendices