Subsequent costs Costs incurred after initial acquisition are capitalised only when it is probable that future economic benefits or service potential associated with the item will flow to the Commission and the cost of the item can be measured reliably. The costs of day-to-day servicing of property, plant and equipment are recognised in the surplus or deficit in the statement of comprehensive revenue and expense as they are incurred. Depreciation Depreciation is provided on a straight-line basis on all property, plant and equipment at rates that will write off the cost of the assets to their estimated residual values over their useful lives. The useful lives and associated depreciation rates of major classes of property, plant and equipment have been estimated as follows: Equipment 2–12 years 8.3–50% Furniture and fittings 5–17 years 5.9–20% Leasehold improvements 9–12 years 8.3–11.1% Leasehold improvements are depreciated over the unexpired period of the lease or the estimated remaining useful lives of the improvement, whichever is the shorter. The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year-end. During the current financial year, a significant number of items with nil book value were reviewed as part of this process and adjusted accordingly. Intangible assets Software acquisition When configuring and implementing software solutions, the Commission assesses whether related expenditure creates an item that can be identified and separated from the Commission, is under the control of the Commission, and will provide future economic benefits or service potential. Acquired computer software is capitalised based on the costs incurred to acquire and bring to use the specific software. Where such criteria are not met, costs to configure software are expensed. Costs associated with maintaining computer software, the development and maintenance of the Commission’s website, and staff training costs are recognised as an expense when incurred. Configuration of cloud-based software subscriptions In addition to the assessments noted above, when configuring and implementing cloudbased software solutions on a periodic subscription basis, the Commission assesses the range of implementation activities that each have different potential accounting treatment. The implementation stages generally cover preliminary scoping, installation and implementation, training, data conversion, post implementation. The Commission takes the view that all relevant costs incurred during the installation and implementation stage should be capitalised. This includes costs incurred to substantially modify the provider offering, or to develop bridging modules with existing systems outside of the platform, or to develop code for bespoke additional capacity. It also includes costs incurred that configure and customise the environment of the provider’s offering to the Commission’s specific business practices. All other costs incurred are expensed. Amortisation The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each financial year is recognised in the surplus or deficit in the statement of comprehensive revenue and expense. 43