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[_] Computer company accounts question

Matt Hamilton matth at netsight.co.uk
Tue Nov 25 10:51:58 GMT 2008

On 24 Nov 2008, at 22:06, Lyle wrote:

> Gareth Hopkins wrote:
>> That time of the year is approaching where the company accounts are  
>> due soon.
>> But this time I am planning to discuss with my accountant about  
>> capitalising our webpages. I have found several references to this  
>> online, but would like to know if anyone else has any experience of  
>> this and if so how they put a value on the site.
>>
>
> I'd like to add to this question. How can you value software IP? I've
> got a piece of software I've developed for the last 9 years, and  
> sell it
> to some profit. How can I value this as an asset for my accounts?


I guess it is different for a company/individual actually in the  
business of selling software, but I had a great bit of wisdom a few  
years back to apply to customers who think they want to IP to code you  
have written and that is 'Software is a liability, not an asset'.

Like I said, I'm sure that doesn't apply to a business writing/selling  
software as their main aim, but just to point out that support/maint  
costs should not be overlooked when valuing the software.  The  
codebase's value with depreciate over time if it is left on its own.

I'd be interested to hear if you find an accountant that actually  
knows anything about this.  I went to a HMRC seminar on R&D tax  
credits.  I thought we could make a good case that development of Open  
Source software could be deemed as R&D.  When I mentioned that our  
entire business is built around the premise of us *not* holding the IP  
of the software I was pretty much laughed at by the guy from HMRC.

-Matt

-- 
Matt Hamilton                                       matth at netsight.co.uk
Netsight Internet Solutions, Ltd.           Understand. Develop. Deliver
http://www.netsight.co.uk                             +44 (0)117 9090901
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