Intangible assets comprise capitalised development costs and any separately acquired software or intellectual property. Development expenditure is capitalised where the directors consider that the project is technically feasible, the company has the intention and ability to complete and use or sell the asset, future economic benefits are probable, and the expenditure can be measured reliably.
Expenditure that does not meet these criteria, including research costs, maintenance costs and general administrative costs, is charged to the profit and loss account as incurred.
Capitalised intangible assets are initially recognised at cost and are subsequently measured at cost less accumulated amortisation and any accumulated impairment losses. Amortisation is charged on a straight-line basis over the asset’s estimated useful economic life once the asset is available for use. The estimated useful economic life applied is 3 years. Assets not yet available for use are not amortised but are reviewed for impairment where indicators of impairment exist.
The directors review the carrying value, useful economic life and amortisation method of intangible assets at each reporting date and recognise an impairment where the carrying value is not expected to be recovered through future economic benefits.
During the year, the company capitalised £321,459 of development expenditure in relation to the ongoing development of software. The directors consider that the expenditure meets the recognition criteria for capitalisation as the project is technically feasible, future economic benefits are expected to arise from its use, and the costs attributable to development can be measured reliably.
The directors have reviewed the carrying value of intangible assets at the year end and do not consider any impairment provision to be required. Where development assets were not yet available for use at the balance sheet date, no amortisation has been charged and the assets will begin to be amortised once they are ready for their intended use. Where assets were available for use during the year, amortisation of £0 has been charged to the profit and loss account.