XYZs 2021 Annual Reports have just been released, and report a net profit of $50 million. The opening book value of equity was $500 million, and the cost of equity is 10%. Included in the expenses recognised was an expenditure of $10 million on software development, which relates directly to a software application that is not presently available for sale, and is expected to be offered for sale in the 2022 financial year only. You are concerned that XYZs earnings, and therefore residual earnings (RE), have been distorted by the failure to recognise the software development expenditure as an asset in the 2021 accounts. You believe that XYZ should have recognised the expenditure as an asset at the end of 2021, and should expense the $10 million when the associated software application generates revenues for XYZ. Explain why the accounting treatment of this item makes no difference to the value of XYZs equity estimated using the residual earnings model.