Ann: FY17 Analyst Pack, page-94

Keep in mind that the WOW comparison was your own. You were happy to bring it up, but now you yourself are saying that it isn't valid.

Last time for me anyway because we are going around in circles. There is no use by date on photos of course, but there is a useful by date. Most customers won't be interested in the hitoric photos, only the most recent. So any new recpature itself makes the old ones past their useful by date.

Of course there are exceptions. Some companies, such as large construction and any governments or corporations paying for the consturcution, national parks etc, will be interested in having a time series of a construction or process. These will be subscribers, of course, as are all customers. However they will extract and retain the relevant information from each of the captures themselves as they are made available. The only incentive they have to continue their subscripitions is to obtain the next capture. The old photos, even for these subscribers who use them, can no longer be monetised for NEA. Because their monetisation period is so heavily weighted to the period between the initial capture and the next recapture, the photos if capitalized would best be deprecitated over a similar matching period if accuracy is of any concern.

For these reasons recognising photo capture as an investing expense or capitalizing them for any longer than the next recapture isn't prudent, conservative accounting. Another way to think of the difference between an investment and operational expense is whether it is a discretionary expansion or maintaining the business. Again taking photos fits into the operational category here. Camera systems are investing expenses worth capitalizing, yes. Taking photos, while it can be argued that they are investments (or else we wouldn't be seeing them there on the financial statements), in honesty, really shouldn't be.

The real golden goose for NEA that keeps giving over time is their camera systems, which I would have thought was pretty obvious.