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Awareness Guide Prospects for Software Capitalization and Development
In this Guide, we tried to clarify the future prospects for proof of intangible assets such as software and applications, as well as accounting for software and application expenses within the IT and emerging technologies business; According to the laws and standards applied in Saudi Arabia and in accordance with international standards issued by the International Financial Reporting Standards (IFRS), the International Accounting Standards Board (IASB) and the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs).
Definitions and Terms
Is a resource controlled by an entity as a result of past events; and expected to flow future economic benefits to the entity.
The amount in which the asset is recognized in the financial position statement by an entity, after deducting the total amortization and total impairment losses.
The amount of cash or the equivalent of cash paid or the fair value of another consideration offered for the acquisition of an asset at the time of its acquisition or construction.
The lapse of an asset and/or the bearing of an obligation within a given time period as a result of the production or sale of the goods, or the allowing of other units to use the assets of the entity or perform services for others or other profit-seeking activities forming the main operations of the going concern.
The ability of an asset, alone or in combination with other assets, to contribute to an entity's cash flows, either directly or indirectly.
A set of factors influencing an entity's value or ability to generate revenue that cannot be distinguished from one another or from another asset of the entity.
Identifiable non-monetary assets with no tangible physical substance.
CST Role in Software Capitalization?
The Communications, Space & Technology Commission has issued an awareness guide for the prospects of software capitalization and development, in order to enhance its role in regulating the information technology sector and emerging technologies, developing the software market and industry in the Kingdom, and in continuation to support and enable technology companies to calculate intangible assets from programs, applications and systems as capital, to have a competitive advantage. Which helps it to grow, expand and lead technically, in addition to enhancing its ability to take soft loans and financing incentives necessary for growth and expansion, and contribute to its inclusion in the local stock market.