# Software Capitalisation Report

### 1. What is Software Capitalisation?

Software capitalisation classifies eligible software development work as **capitalised** or **non-capitalised**.

* **Capitalised work** relates to building new software assets or enhancing existing platforms.
* **Non-capitalised work** covers operational, maintenance, or bug-fix activity.

Correct classification has a significant impact on financial reporting, compliance (GAAP/IFRS), and investment tracking.

***

### 2. How Typo Performs Capitalisation

#### **2.1 Data Sources**

* **Issue Tracker** (e.g., Jira, Linear): Issues, types, status history, timestamps.
* **Version Control** (Git): Commits/PRs mapped to issues for contributor-level accuracy.
* **Custom Fields**: Fields or labels for issues in R\&D, Infra, Tech debt, etc.

#### **2.2 Classification Rules**

* **Issue Type Mapping**: Define which issue types are typically capitalised vs non-capitalised.
* **Category Assignment**: Assign work to categories such as “Product Development,” “Maintenance,” and “R\&D.”

#### **2.3 Contributor Attribution**

For each issue, Typo:

* Identifies contributors and work logged.
* Applies capitalisation % to show the share of capitalised vs non-capitalised work.
* Tracks history when status or assignee changes.

***

### 3. Month-on-Month Capitalisation Summary

Typo generates a monthly summary showing:

* **Overall % Capitalised** for the period.
* **% Non-Capitalised** for the period.
* **Trend Chart** of capitalisation % month over month.
* **Breakdown by Category** (e.g., New Feature Development, Enhancements, Maintenance).
* **Breakdown by Custom Field** (e.g., R\&D, Compliance).

<figure><img src="https://813988662-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FeCZyG1kSmV84geZ9Ws6s%2Fuploads%2FrWpz5ewcs5FYQDOsLn8c%2Fimage.png?alt=media&#x26;token=de784224-8508-4271-bf83-9a571f1648ec" alt=""><figcaption></figcaption></figure>

***

### 4. Capitalisation View in Typo

Typo’s capitalisation table provides granular, traceable data for finance teams, with filters for **time range**, **developer**, and **issue type**.

#### **4.1 Columns Displayed**

<table><thead><tr><th width="225.07421875">Column</th><th>Description</th></tr></thead><tbody><tr><td><strong>Key</strong></td><td>Issue key (e.g., PROJ-123)</td></tr><tr><td><strong>Type</strong></td><td>Issue type (Story, Bug, Task, Sub-task, Feature Request)</td></tr><tr><td><strong>Summary Name</strong></td><td>Issue title</td></tr><tr><td><strong>Epic Key</strong></td><td>Linked epic’s key</td></tr><tr><td><strong>Epic Summary</strong></td><td>Epic’s title</td></tr><tr><td><strong>Associated Assignee</strong></td><td>Current assignee; row updates when changed</td></tr><tr><td><strong>Custom Field</strong></td><td>Work category</td></tr><tr><td><strong>Status</strong></td><td>Current workflow status; row updates when changed</td></tr><tr><td><strong>Issue Update Time</strong></td><td>Timestamp of latest assignee/status change</td></tr><tr><td><strong>Contributor</strong></td><td>Developer name</td></tr><tr><td><strong>Start Date of Ticket</strong></td><td>First moved to “In Progress”</td></tr><tr><td><strong>Resolved Date of Ticket</strong></td><td>First moved to “Done”</td></tr><tr><td><strong>Release Fix Version</strong></td><td>Jira fix version(s)</td></tr><tr><td><strong>Story Points</strong></td><td>Assigned story points</td></tr><tr><td><strong>Capitalization %</strong></td><td>Capitalized share of work for the issue</td></tr><tr><td><strong>Category</strong></td><td>Category tag (Capitalised/Non Capitalised)</td></tr></tbody></table>

***

### 5. Linking to Investment Distribution

Typo’s capitalisation report can be directly linked to **Investment Distribution** reporting:

* Finance teams can take the **capitalisation %** and **non-capitalisation %** from Typo
* Typo uses finance team inputs on developer CTC, work hours per day, and total workdays to calculate cost per hour, then applies the capitalisation and non-capitalisation percentages to total hours worked to derive respective costs.
* This enables direct mapping of engineering effort into CapEx/OpEx figures in accounting systems.
* The linkage provides a **full investment view** by category, contributor, and time frame.

<figure><img src="https://813988662-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FeCZyG1kSmV84geZ9Ws6s%2Fuploads%2F6RH81AvKXroIGKxTWMBl%2Fimage.png?alt=media&#x26;token=3620460d-069c-43a8-ac9c-47d77c72d657" alt=""><figcaption></figcaption></figure>

***

### 6. Why Finance Teams Use Typo for Capitalisation

* **Granular % Data**: Breaks down capitalised vs non-capitalised work at the issue level.
* **Customizable Rules**: Aligns with your capitalisation policies.
* **Investment Linking**: Capitalisation % can directly feed into financial cost models.
* **Audit-Ready**: Historical changes in status, assignee, and percentage are retained.

{% hint style="info" %}
To enable this report for your account, please reachout to support or <hello@typoapp.io>
{% endhint %}