The cost report
How the cost report brings labour and AI tooling into one engineering-cost figure, splits it into CapEx and OpEx, and shows what it can't yet attribute.
Updated 18 July 2026
The cost report answers one question: what did engineering cost this period, and how much of it can be capitalised? It brings together two separate cost streams — the labour ledger and AI tooling spend — into a single engineering cost, and splits that cost into capitalised (CapEx) and expensed (OpEx) work. This page explains how the pieces combine; the streams themselves are each documented on their own.
Two cost streams
The total on the cost report is labour cost plus AI tooling spend. The two are computed independently and shown side by side, never blended into one untraceable number:
| Stream | What it is | Where it's built |
|---|---|---|
| Labour | hours × hourly rate × overhead per effort entry | The effort model |
| AI tooling | Metered AI spend for the period | AI spend attribution |
The per-person and per-project tables carry both columns and a combined total, so you can see the labour and AI halves of any row rather than only their sum.
CapEx and OpEx
The split into capitalised and expensed cost comes from each effort entry's financial classification — the capitalisable-or-not decision your classification rules make. Capitalisable cost is CapEx; non-capitalisable cost is OpEx. The cap rate on this report is cost-based: capitalised cost as a share of total cost.
Attribution and gaps
The report shows what it can't yet place rather than hiding it:
- AI spend is attributed by person on this report. Spend that can't be tied to a known person appears as a separate Unattributed line, included in the total, never dropped.
- Effort with no rate carries hours but no cost. If an active person has no hourly rate covering the period, their effort still counts as hours; the cost is left blank and a coverage-gap note flags how many people are missing rates. Set rates in People to close it.
- The AI Tax badge on this report expresses AI spend as a percentage of labour cost — the AI line item measured against the engineering it supports. It needs rates in place, and reads as unavailable without them.
What the numbers mean
- Total engineering cost is labour plus AI tooling, each traceable back to its own ledger.
- Cost is modelled — rate × hours × overhead — not payroll, the same caveat the effort model states for hours.
- The CapEx/OpEx split is only as good as your classification: low-confidence classification shows up as cost you can't fully defend, which is what the R&D capitalisation workflow drives down.
- Missing rates and unattributed AI spend are surfaced, not absorbed, so a gap in the inputs is visible instead of quietly distorting the total.