Asset Type and Amortization Method

1. Customised software is separately identifiable; it is being constructed with an intention to sell or earn revenues; it can be measured reliably; the manpower, salaries for developers fall under the Development phase of intangible assets IAS 38. This means you can capitalise these costs incurred  during product development. 

2. The cloud services- it is the technology consumed during the construction of the asset. So these costs also can be capitalised. 

Initially recognised at cost less accumulated amortisation.

Subsequent measurement is the revaluation model, I.e., Fairvalue of Asset less accumulated amortisation.

Amortisation method: from 2016, amortisation method for intangible assets is prescribed by IFRS as 

1. Straight line method- default method

2. Reducing balance method

3. Units of production

Pattern of consumption decides which amortisation method is important. When you can not identify the pattern of benefits, use the straight line benefits.