\nBNZ says changes to its software capitalisation accounting will reduce half-year profit by $253 million\n<\/p>\n
BNZ says changes to the accounting process relating to the bank’s software capitalisation policy will reduce half-year profit by $253 million.<\/p>\n
BNZ says the timeframe in which software is expected to generate economic benefits is shortening.<\/p>\n
“These changes are expected to better align BNZ (and parent – National Australia Bank Group\u2019s) accounting policies with a rapidly evolving technology environment with more frequent enhancements and faster obsolescence, including from increased AI adoption,” BNZ says.<\/p>\n
Software capitalisation is\u00a0an accounting practice that treats the costs of developing, or buying, software as a long-term asset on a company’s balance sheet, instead of an immediate expense on its income statement. This allows companies to spread the software’s cost over its life via amortisation, increasing short-term profitability.<\/p>\n
“The change will be applied to both current and future software balances and is expected to reduce BNZ\u2019s capitalised software balance at 31 March 2026 by NZ$352 million and BNZ\u2019s statutory profit for the six months ended 31 March 2026 by NZ$253 million (post tax).”<\/p>\n
“There is no impact on BNZ\u2019s [regulatory] capital given capitalised software balances are already deducted from Common Equity Tier One capital,” BNZ says.<\/p>\n