AcSEC software proposal to have major effect.The American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Institute of CPAs accounting standards executive committee issued an exposure draft of a Statement of Position, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. The ED proposes that certain costs be capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. as long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets, although many companies have been expensing these costs. "Companies would have to set up cost accumulation mechanisms they might not have," Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. D. Ameen, chairman of the AcSEC internal-use software costs task force, told the journal. "Larger companies likely have such mechanisms in place for inventories or capital projects and would only have to make modifications to adapt these to software." Ameen said this was the case at General Electric, where he is vice-president and comptroller. A smaller company, however, might have to take a close look at cost accumulation methods. Ameen said the exposure draft might not receive the volume of comment letters it deserves. People just don't realize how widespread the implications are," he said. "The entire underlying concept of this statement is controversial." The ED touches on ongoing controversies over soft assets, and the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). has expressed some concern about the long-lived asset classification proposed in the draft. Ameen said he believes some companies will object to the ED because they are also expensing these costs for tax purposes. "The possible implications on cash flow will concern some enterprises." Finely honed definition The proposed statement would not change existing FASB pronouncements This article is a list of Financial Accounting Standards Board (FASB) pronouncements, including Statements, Concepts Statements, Interpretations, and Technical Bulletins, which are issued to provide rules and guidelines in preparing, presenting, and reporting financial statements , costs for non-internal-use software would not be affected. CPAs and companies may want especially to look at appendix A, which gives 20 examples of what is and is not an internal-use situation. An example of internal-use costs: an entity develops software that helps it improve cash management, which may allow the entity to earn more revenue. An example of a non-internal-use cost. An entity sells software required to operate its products, such as video cassette recorders video cassette recorder Noun a device for recording and playing back television programmes and films video cassette recorder video n → Videorekorder m or voice-mail systems. A more detailed discussion of this ED will appear in an upcoming issue of the journal. One free copy of the ED (product no. 800108JA) may be ordered from the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). Order Department, 800-862-4272. It is also on the Accountants Forum in the accounting library and on the AICPA Web site (http:// www.aicpa.org) in the accounting standards area. Comments are due by April 17. |
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