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Useful life of Mobile Applications


Hello

I wanted to ask how we determine the useful life of a mobile app.

Is an app that is developed and is going to be used indefinitely to generate income for a company considered to have an indefinite useful life?

I know software like oracle is considered to have 3-5yrs useful life because of advancement in technology, but that seems to be different as the whole software usually has to be replaced and the license has to be bought again.

But a company's own app is constantly updated through the appstore or google play store etc.

Do we consider it to have an indefinite useful life or is there a way to determine its useful life?

asked Aug 25 in IAS 38 - Intangible Assets by Omar

1 Answer

0 votes
 
Best answer
It cannot be indefinite. However determining the useful life may be difficult and it will require management judgement. The period that mobile app requires a major revision or update might be considered as the useful life.  If the app is continuously evolving it can also be difficult. But I would say 5 to 10 years would be the potential lifetime of a mobile app depending on many factors like the industry the technology, etc. Cost of app updates and new versions may be capitalised.
answered Aug 25 by Anup
edited Aug 25 by Mysio
Thanks for the answer


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