In Implementation of Its Role in Regulating the IT Sector.. CITC Issues Guide on Software Capitalization and Development Prospects

The Communications and Information Technology Commission issued

the awareness guide on software capitalization and development prospects

, which includes the most prominent methods for the accounting treatment of software and computer application expenses, in implementation of its role in regulating the information technology and emerging technologies sector, and developing the software market and industry in the Kingdom.

The guide

aims to provide technology companies operating in the Kingdom with knowledge of the mechanism for calculating and recognizing and capitalizing any intangible asset during software research, development, and innovation, and enabling them to account for software products as an asset among the company's assets, in addition to shedding light on future prospects and economic benefits of capitalizing intangible assets such as software and computer applications.

This comes in support of technology companies to have the competitive advantage that helps them grow, expand, and achieve technological leadership, alongside enhancing their ability to obtain low-interest loans and financing incentives, and enhancing their chances of listing on the Saudi financial market, in accordance with the regulations and laws in effect in the Kingdom, and in line with the standards issued by the International Financial Reporting Standards Foundation (IFRS) and the International Accounting Standards Board (IASB) and the International Financial Reporting Standard for Small and Medium-sized Entities.

It is noted that the Communications and Information Technology Commission makes supporting the information technology and emerging technologies sector one of its strategic priorities, by issuing the regulations that enable it in the communications and information technology market locally and internationally, and contributing to enhancing the possibility of exporting its products to various global markets.