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