RWS AR 23 Final Single pages - Flipbook - Page 108
Independent Auditors' Report to the Members of
RWS Holding plc (continued)
Capitalisation and impairment of development costs (2023: £26.1m, 2022: £22.4m)
Refer to the Audit Committee Report (page 82) and refer to the Note 13 of the Consolidated Financial Statements (page 134).
The Group capitalises eligible costs in the development of its software products and internal systems. There is a risk of
inappropriate capitalisation of these development costs, which require signi昀椀cant judgement as to whether the costs meet the
capitalisation criteria per IAS 38.
Our response to the risk
Our audit procedures comprised the following:
We performed walkthroughs of the capitalised development cost process
and assessed the design e昀昀ectiveness of key controls.
We selected a sample of development cost business cases, supporting
additions, to understand the nature of the costs, and to assess whether the
items have been appropriately capitalised in accordance with IAS 38. We
speci昀椀cally challenged this with respect to capitalisation of costs incurred
on products already in use, in order to validate managements judgements
around whether the costs were likely to give rise to incremental economic
bene昀椀t.
We performed analytical procedures, including comparison of capitalization
and amortization to prior year.
Further to this, we challenged management on the useful economic life of
assets capitalised, including validating that additions are amortised over the
remaining useful life of the underlying asset to which they relate.
We audited capitalised costs to supporting documentation including 3rd
party invoices. We also performed speci昀椀c HR testing to validate salary
information to supporting documentation.
We reviewed the Group’s disclosures in relation to capitalised development
costs made in the 昀椀nancial statements to con昀椀rm the adequacy of disclosure
of the Group’s capitalisation policy.
We assessed the impairment of assets in use and those still under
development in accordance with IAS 36 by considering whether there were
any indicators of impairment, including obsolescence of technology and
changes to underlying business and market trends.
We performed full and speci昀椀c scope audit procedures over this risk area in
3 locations, which covered 100% of the risk amount.
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RWS Holdings plc — Annual Report 2023 FINANCIAL STATEMENTS
Key observations communicated
to the Audit Committee
We concluded that development
costs capitalised under IAS 38 are
materially correct and that it is
reasonable that no impairment has
been recorded on these assets as at
30 September 2023.
