Can someone explain something - on the 4C their net operating cash flow is 912,000. They've then capitalised their dev. costs for 750,000 to end up with a total operating and investing cash flow of 85,000.
My understanding was that capitalisation of costs occurs so the company can spread the cost of an asset (in this case intellectual property) over the life of the asset. And in this case presumably the company has held the intellectual property for a while (ie its not new to this quarterly).
So my question is if the company has already paid for this intellectual property a long time ago, then where is the 750,000 subtracted from their net operating cash flow physically going? I can understand that they will pay less tax if they capitalise the cost of the asset (which has been paid for a long time ago) but where does the cash physically go??
PPL Price at posting:
58.0¢ Sentiment: Hold Disclosure: Not Held
