CERTYNEX IFRS ACADEMY

Ferrandel acquires a computer numerically controlled machining centre. The overall price includes the control software installed by the manufacturer; without this software the machine cannot perform any operation. How should Ferrandel account for the control software?

As a separate intangible asset within IAS 38, since the price of the software can be identified on the manufacturer's invoice.

As an integral part of the machine, recognised as property, plant and equipment under IAS 16.

As an intangible asset, since software is by nature non-physical, whatever its link with the hardware.

As an expense of the period, because the software has no resale value independently of the machine.