Xero had capitalised the expenses

i) Capitalised Development Costs: Xero had capitalised the expenses experienced during developing its software. The expense was amortised over the programs projected valuable life of the package. The estimation of the value of the program developed within the company was found judgemental and it was estimated on the basis of the time that the staffs had spent for the development.

So, this cost was found to be stated as capitalised cost in the financial statements.ii) Impairment of Capitalised Development costsFor Xero, intangible assets comprised of 86% of the non-current assets and were found to be capitalised as development cost. But, the intangibles to be measured for impairment requires limited lifetime and the assessment were found to be estimated by decision.

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