MJ,
I am also happy with the progress. As I said in the earlier post, I was expecting 20% growth for BAU, plus 10% for implementations which obviously haven't eventuated, or, we're still in trial for May & June. (Which is fine, and like you, expect growth to ramp up this current quarter).
I am familiar with the accounting standards and R&D can be capitalized if spend is on significant product enhancement beyond implementation, where the benefits of the work capitalized will be realised over many years. Eg. developing a new feature for a client, deep integration that is complex over multiple legacy systems and not trivial - all these point to a large scale integration of some sort.
CFOs and CEO's are hesitant to capitalize these as an intangible asset unless it's a no brainer, as these are tested for impairment each year end audit and written down if it can't be justified.
Something to keep an eye out for in the coming annual results.
An even stronger R&D indicator is if GSW were to apply for and receive an R&D tax credit, as, in addition to the above, these expenses are required to be innovative, uncertain and novel in nature. I'd be even happier to see an R&D tax refund.
Also, the acceleration of growth comment is meaningful. Management would not make that type of comment in the current situation unless they were reasonably expecting the start of geometric growth.
Cheers,
dim81
Expand
