Definition

Token capitalisation

Defined term

Token capitalisation is the discipline of measuring, carrying and reporting capitalised AI and token spend on the balance sheet as a finite-life intangible asset. It begins where the token ledger meters development spend, runs through initial measurement, useful life and amortisation, absorbs any IAS 36 impairment, and ends at the IAS 38 IAS 38 §118 carrying-amount reconciliation and disclosure note.

How it differs from AI-software capitalisation

The generic question of whether to capitalise or expense AI software cost is well covered by the accounting literature and by our sister reference. Token capitalisation is narrower and downstream of that decision. It takes the capitalise decision as settled and treats the token itself as the unit of measurement, so the metered request becomes the smallest auditable piece of the intangible. The accounting authorities describe how an internally generated intangible is recognised and amortised IAS 38; token capitalisation applies that machinery to an asset whose cost base is a token ledger and whose underlying model may be obsolete within a year.

When token spend becomes capitalisable

Token spend becomes capitalisable only when it is incurred in the development phase of an internally generated intangible and every recognition condition is met IAS 38 §54-62. Research-phase experimentation and ordinary run-phase inference are expensed. The measure phase exists to draw that line at the level of the individual tagged request, so the amount entering the asset can be traced back to metered consumption rather than estimated by allocation.

The lifecycle the asset follows

Once recognised, the token-built intangible follows the same finite-life path as any other. It is measured at cost, amortised over a defensible useful life on a basis that reflects the pattern of benefit IAS 38 §97 IAS 38 §98, tested for impairment when an indicator such as model deprecation arises IAS 36 §12, and reconciled from opening to closing carrying amount in the disclosure note IAS 38 §118. This site is the reference for each of those steps applied specifically to capitalised token spend.