Thanks for the additional data, it certainly helps inform the debate Lightforce. However my concern with the issue was not so much the choice of amortisation metric but the change in the length of the metric. Quote:
Prior to 2014, Greencross seems to have expensed all software costs as incurred (if any), which is the most conservative treatment. Starting in 2014, they opted to capitalise and then amortise that cost over a period of years.
The period used to amortise such software, an asset which tends to become obsolete fairly quickly, jumps out most. Three to five years is typical. When Greencross started capitalising then amortising software in 2015, it opted to do so over a 10 year useful life. In a world of rapid software obsolescence, 10 years is an awful long time.
And in 2016 it lengthened that useful life from 10 years to 15 years. How many pieces of software that you bought in 2003 do you still find useful today?
To me at least the Forager argument is well made when evaluated in this light. Interesting discussion.
GXL Price at posting:
$4.42 Sentiment: None Disclosure: Not Held
