Model weights
The trained model, its weights, is the intangible the whole framework recognises. Its carrying amount is not the total programme spend. It is the sum of the directly attributable costs incurred after all recognition criteria were met, and it excludes research, earlier expensed costs, and general overhead.
What enters the carrying amount
The recognised intangible is the trained model. Its carrying amount comprises the directly attributable development-phase costs incurred after all six criteria were met.
The capitalised internal-use software asset comprises qualifying costs incurred while completion was probable and no significant development uncertainty remained.
Cost comprises the directly attributable expenditure necessary to create and prepare the model to operate as intended, from the date the criteria were metIAS 38§66. That is the qualifying engineering, the compute consumed developing it, and directly attributable data preparation.
What is excluded
Selling, administrative and other general overhead, identified inefficiencies and initial operating losses, and expenditure recognised as an expense in earlier periods are excluded and cannot be reinstatedIAS 38§71. This is why the recognised asset is usually far smaller than the total spent on the AI programme.
A programme spends across research, then a qualifying development phase. Only the engineering, compute and data-preparation cost incurred after the recognition date enters the asset. Research-phase spend before that date stays in the P&L and is not added back. All figures are illustrative.
- S1IAS 38 Intangible Assets, IFRS Foundation (IFRS). https://www.ifrs.org/issued-standards/list-of-standards/ias-38-intangible-assets/
- S3Applying ASC 985-20 and ASC 350-40 to software costs, Crowe (US GAAP). https://www.crowe.com/insights/how-to-apply-asc-985-20-asc-350-40-software-costs