When you build custom software, it isn't an expense — it's an asset. Under both IFRS (IAS 38) and Canadian ASPE (Section 3064), custom-built software qualifies as an intangible asset that sits on your balance sheet and is amortized over its useful life.
This guide explains the accounting treatment, what your accountant needs from you, and why this matters for financing, due diligence, and your annual tax burden.
What's inside
- • IFRS (IAS 38) and ASPE (Section 3064) requirements
- • What counts as a capitalizable development cost
- • Amortization periods and useful life estimates
- • SaaS subscription vs. owned software on your financials
- • Cost-allocation documentation your accountant needs
// saas subscription
Operating expense
✗P&L hit every renewal
✗Never on the balance sheet
✗Zero residual value
// custom-built software
Intangible asset
✓Hits the balance sheet
✓Amortized over useful life
✓Counts in financing & due diligence
// cumulative cost over 5 years
SaaS: 25 seats at $40/mo, +5%/yr inflation. Custom: $2,500/yr amortization.
See the full amortization schedule →// download the whitepaper
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