Standards-anchored reference to primary IFRS and FASB text. Not accounting advice.
AI Capitalisation
Axis 3 / treatments

What the treatment does to the numbers

Head note

Every routing decision resolves to a treatment. Capitalise moves spend to the balance sheet as an intangible; expense charges it to the P&L now; prepaid defers committed but unconsumed spend. Once capitalised, an asset is amortised over its useful life and tested for impairment. This axis is where FP&A reads the earnings effect.

1

The five treatments

Capitalise
recognise as an intangible asset
CAPITALISE
Expense
charge to the P&L in the period
EXPENSE
Prepaid
committed but unconsumed spend
PREPAID
Amortisation and useful life
unwinding the asset over its life
CONDITIONAL
Impairment
writing down a superseded model
CONDITIONAL
Sources of record
  1. S1IAS 38 Intangible Assets, IFRS Foundation (IFRS). https://www.ifrs.org/issued-standards/list-of-standards/ias-38-intangible-assets/
  2. S2Handbook: Software and website costs (ASC 350-40 internal-use software), KPMG (US GAAP). https://kpmg.com/us/en/frv/reference-library/2026/handbook-software-website-costs.html
Standards-anchored reference · not accounting adviceRevised 2026-07-24