NhyiraCapital Limited began research into the software it has used over a period. The software has been operational for the generation of economic benefits over the years. The company decided to research the development of the software. The company assigned four researchers who were paid R10,000 in total for the period of the research. Transportation and feeding costs incurred in carrying out the research amounted to R4,000. The company further acquired four tablets with research software for R25,000 each to enable them to ascertain accurate findings. The company’s software is separately identified and has a commercial
3.1.
NhyiraCapital Limited began research into the software it has used over a period. The software has
been operational for the generation of economic benefits over the years. The company decided to
research the development of the software. The company assigned four researchers who were paid
R10,000 in total for the period of the research. Transportation and feeding costs incurred in carrying
out the research amounted to R4,000. The company further acquired four tablets with research
software for R25,000 each to enable them to ascertain accurate findings.
The company’s software is separately identified and has a commercial value. The research was
completed and there is a need for developing the company’s software. A development cost of
R125,000 was reliably measured and incurred. The economic useful life of the software was estimated
to be 10 years from the date of completing its development. Show how the software and its related
expenses are to be capitalized in the financial statements under IAS 38.
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