Platform development and technology costs

Recently, there has been a significant increase in companies making material investments in platform development and technology costs. How a company accounts for such costs, i.e., whether they are expensed or capitalized, can significantly impact the reporting company’s operating results. In most cases, the decision about which costs need to be capitalized and which costs need to be expensed is subject to critical evaluation of accounting literature and application of accounting judgments.

We have observed that companies follow different approaches while accounting for platform development and technology costs in their financial statements. Also, there is a difference between Ind AS / IFRS and US GAAP in this area. In this publication, we assess the considerations related to platform development and technology costs and the possible approaches to accounting for such costs.