Mock D task 3 by Josie Kelly

Intangibles

2025-07-22 12:30:40 UTC

An internally generated brand cannot be capitalised

PIRATE

2025-07-22 12:30:58 UTC

Probable, intention to complete, resources available, ability to use/sell, technically feasible, expenditure measured reliably

Team Motivation

2025-07-22 12:31:18 UTC

Incentivise participation through awards for performance on the project, follow on opportunities from participation, additional renumeration for project roles etc

Accounting Treatment

2025-07-22 12:31:58 UTC

App costs

Need to split into what costs are research and what development - only after it all PIRATE criteria can it be a development cost and we can capitalise.
Will then amortise over useful life

Brand name

Internally generated asset so don't capitalise

Pirate

2025-07-22 12:32:01 UTC

Use the Pirate model to break answer down as to whether the 2 costs fit the criteria for intangible assets

Intention to complete

2025-07-22 12:33:40 UTC

Needs to have the intention of being made into an end product which here it does as a Training4u app is created.

Team Engagement

2025-07-22 12:34:04 UTC

If lack of volunteers, it may be worthwhile identifying individuals who suit the required team members and rewarding them the position based on merit - highlighting there will be incentives for their work - slightly different approach to recruitment

Task A

2025-07-22 12:34:07 UTC

App creation costs = research and development costs (development normally 80-90% of total product costs), development costs are amortised over useful life once commercial production begins (may be done on straight line basis or reflecting expected future sales levels)

Brand name costs = internally generated, not an intangible asset as cannot be separated from the org

Team motivation

2025-07-22 12:34:30 UTC

incentives for joining the team
let the staff know that this will be part of their working hours and not additional time after hours
set targets that have rewards to try encourage engagement

SMEs

2025-07-22 12:35:18 UTC

If no uptake from internal staff, may be worthwhile taking on subject matter experts from external consulting - meaning we have experts in the field and allow our core staff members to continue with their work - therefore no requirements for backfill (can these expenses also be capitalised..?)

Motivation

2025-07-22 12:36:13 UTC

Ask staff why they don't want to work on the project to highlight areas they can improve
Offer incentives / rewards for volunteers

Brand Name - this cannot be done under IAS 38

2025-07-22 12:36:19 UTC

brands, names logos and things like that cannot ne capitalised. If brand is purchased then must be expenses

New app created, I believe it should be capitalised, and can deliver future benefits, through the issue of its licenses

2025-07-22 12:36:55 UTC

Intangible asset

2025-07-22 12:37:04 UTC

An intangible asset is defined as an identifiable, non-monetary asset without physical substance.

As the brand is internally generated, it cannot be capitalised.

The development costs for the app creation need to be considered against PIRATE.

With regards to the $1.28m capitalised for the app, does this amount include any "research" costs? If it does, then this needs to be removed and put directly into P&L. We can only capitalise an asset once we have hit the 5 requirements, we have the resources to complete, we have reliably revenue streams, it is likely that we will complete.

2025-07-22 12:37:05 UTC

The $1m brand name cannot be capitalised as it is an internally generated brand and therefore has no resale market to attach a value to. If it was a "purchased" brand then yes It can be capitalised.

2025-07-22 12:37:11 UTC

Team Motivation

2025-07-22 12:37:20 UTC

Incentivise employees to join the team
Communicate how the app will benefit them, more measured performance for attendees on the course

Hire contractors to beta test app and outsource marketing for initial period

2025-07-22 12:38:31 UTC