Ann: Half Year Report and Accounts, page-3

I don't have an issue with the methodology.

For me the main purpose of capitalising technology is not to prop up the balance sheet but to match expenses against future earnings when the benefits of those expenses will be realised.

I want to see how the asset is performing today. Upfront investments with long term benefits immediately hitting the P&L make it hard to do this. If I can not see this, then I can not assess whether the business and its leaders are making any progress unless they keep investments stable which doesn't always make sense.

Capitalising and amortising technology helps with this. It allows past investments to be applied to this period and todays investments to be applied to future periods. It's not perfect but is stable and provides a better picture of performance.

Jayride also help with the way that they structure their P&L in this regard. They try to make it clear what costs are variable and what costs are current period vs future period. It is once again not perfect but it helps with modelling and shows a level of transparency and a willingness to help their investors to track their progress and to hold them to account that other companies do not always do.

When an amount is capitalised and added to the balance sheet it does not stay there indefinitely. It is amortised over five years. So this line in the balance sheet tells me that over the next 5 years $2 million + will hit the P&L in the amortisation line.

The technology can also be written down if the Auditor does not believe the business will reasonably generate more discounted cash flows then today's value of the technology on the balance sheet. They provide the assumptions in the impairment note. This is actually a handy process as the investor gets to know whether the business was able to defend the value of its previous investments. If there is impairment then the investor knows that they were not. In Jayride's instance they were able to do it, presumably because of improved contribution margin and a potential vaccine driven recovery in a less competitive environment. I thought they may struggle with this as the auditors are risk adverse and travel would worry them.

The final point worth considering is what the investment market cap relative to the implied value in use of the technology. The tech on the balance sheet is less than 10% then the market cap.

Hope this helps.