AITB No. 47 Accounting for AI-Enhanced Virtual Reality (VR) Training Platforms
Issue: How should entities account for costs and benefits associated with the development, deployment, and operation of AI-enhanced VR training platforms?
Background: Industries like healthcare, military, and engineering are adopting AI-powered VR platforms for immersive training experiences, resulting in enhanced skill development, risk reduction, and improved training outcomes.
Guidance:
- Capitalization of VR Training Platform Costs: Expenses related to the design, development, or acquisition of AI-enhanced VR training platforms intended for long-term training initiatives should be capitalized as an intangible asset.
- Expensing of Content Development and AI Training Tools: Costs associated with developing VR training content or refining AI-driven training scenarios based on user feedback should be expensed as incurred.
- Amortization of Capitalized Platform Costs: The capitalized costs should be amortized over the platform's expected useful life, considering technological advancements, evolving training needs, and industry standards.
- Benefit Recognition: Financial benefits derived from reduced traditional training costs, enhanced trainee performance, reduced training-related risks, and improved training outcomes due to the AI-powered VR capabilities should be recognized in the income statement in the corresponding period.
Examples:
- Hospital U1 invests $5M in an AI-enhanced VR training platform for surgical procedures, anticipated to be effective for 8 years. They would capitalize the $5M and amortize it over the 8-year span.
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.