AITB No. 20 Accounting for AI-Driven Customer Support Systems
Issue: How should entities account for costs and benefits associated with the implementation of AI-driven systems for customer support, such as chatbots and virtual assistants?
Background: Customer support operations are increasingly leveraging AI to provide instant, accurate, and scalable support to customers. AI-driven systems like chatbots can address a significant portion of customer inquiries, leading to improved customer satisfaction and operational efficiency.
Guidance:
- Capitalization of Customer Support System Costs: Costs associated with the development or acquisition of AI-driven customer support systems for long-term operational use should be capitalized as an intangible asset.
- Expensing of Data Training and Routine Updates: Costs related to training the AI system with customer interaction data or routine system updates to improve accuracy and efficiency should be expensed as incurred.
- Amortization of Capitalized System Costs: The capitalized costs should be amortized over the system's expected useful life, considering technological advancements and evolving customer support practices.
- Benefit Recognition: Financial benefits arising from reduced customer support staff costs, increased sales due to improved customer experience, and enhanced brand loyalty should be recognized in the income statement in the relevant period.
- Examples:
- Company T invests $1.2M in an AI-driven customer support system expected to remain effective for 5 years. They would capitalize the $1.2M and amortize it over the 5-year period.
Note: This is a fictional representation and does not represent any real-world standard for AI. The development of such standards would involve extensive consultations with experts, stakeholders, and the public. Fictional representations simplify complex AI concepts, stimulate discussion, envision future scenarios, highlight ethical considerations, encourage creativity, bridge knowledge gaps, and set benchmarks for debate in fields like accounting.