Intangible AssetsInternally Developed Software

CO3 meeting 17-09-2015

FP-FAS-GPA

INTANGIBLES PROJECT / FP-FAS 2

External Auditor Recommendation

CO3 Meeting 20150917

•External Auditors have recommended that CERN implement the internal processes necessary to identify and value internally developed software as part of our intangible assets.

•The auditors consider that the scale of internally developed software at CERN is considerable, so without including them the value of intangible assets presented in the Financial Position is significantly understated.

INTANGIBLES PROJECT / FP-FAS 3

PROJECT PROGRESS TO NOW

CO3 Meeting 20150917

• 2014 - Meetings with technical side and requests for data (160 software identified) to support drafting the policy

• Theoretical issues identified, External Auditors and E&Y consulted for solutions.

• Policy drafted and provided to CERN’s External Auditors• 2015 – Meetings with technical side and requests for data sent

out with a Guideline to assist in completing the Excel table

INTANGIBLES PROJECT / FP-FAS 4

PROJECT OUTSTANDING (for GPA)

CO3 Meeting 20150917

• Receive data by 30 Sept• Record in a central register (Infor EAM)• Value man-months of development by year• Calculate depreciation based on useful lives provided by

technical contacts• Development of EDH tracking and validation document for

use 2016• Phase 2 of project re direct attributable costs on acquired

software is in progress (guideline issued, meetings held with IT & AIS, data collection)

INTANGIBLES PROJECT / FP-FAS 5

ACCOUNTING POLICY

CO3 Meeting 20150917

• For existing software developed since 1/1/2012: estimated costs based on estimated time and average people costs

• For new software: costs of CERN manpower based on estimated time spent where projects meet recognition criteria

• General threshold: 100kCHF by project/software per year after it is in production

• Depreciation is straightline over the useful life

INTANGIBLES PROJECT / FP-FAS 6

DATA COLLECTION

CO3 Meeting 20150917

• Deadline is 30 September• Data is collected in an Excel table until end 2015• A practical guideline on implementing the Intangible Assets

Policy on internally developed software was issued

INTANGIBLES PROJECT / FP-FAS 7

ISSUES

CO3 Meeting 20150917

• Definition of software• Level of detail to use• Before the software is in production: development phase vs research

phase • After the software is in production: improvements vs maintenance• Useful life: cannot accept indefinite• Integrated Circuits: data will be collected but included in the accounts

under Tangible assets. Challenge to avoid double counting with cost to completion of projects

INTANGIBLES PROJECT / FP-FAS 8

THANK YOU FOR YOUR ATTENTION & COOPERATION

CO3 Meeting 20150917

• Please do not hesitate to contact us if you have further questions or suggestions

Jan ROBINSON 62207 jan.kirsty.robinson@cern.ch

Julie FALCON 63270 julie.falcon@cern.ch