Internal-use software statement issued.Accounting practices for the costs of software used internally have been diverse, but a new SOP from AcSEC brings consistency to this multibillion dollar niche. Accounting for the Costs of Computer Software Developed or Obtained for Internal Use requires that many costs to develop or obtain internal-use software 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. . The statement also helps clarify (company) Clarify - A software vendor, specialising in Customer Relationship Management software. Nortel Networks sold Clarify to Amdocs in 2002. http://amdocsclarify.com/. what is, and is not, internal-use software and retains an appendix from the ED listing examples. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. J. Noll n. 1. The head; the noodle. , technical manager, AICPA AICPA See American Institute of Certified Public Accountants (AICPA). accounting standards, AcSEC made two key changes to the statement after the exposure period. (For more background, see "AcSEC Software Proposal to Have Major Effect," JofA, Feb.97, page 11, and "Internal-Use Computer Software: The Fixed Asset of the Information Age," JofA, Mar. 97, page 14.) First, the effective date was pushed back a year to fiscal years beginning after December December: see month. 15, 1998, to give entities more time to implement the new requirements. "Second, we widened the scope to account for data conversion costs, which the ED did not address," said Noll. The statement generally requires these costs to be expensed as incurred. "AcSEC realized that data conversion is a key element in the process of developing new software and that entities need guidance to account for those costs." The final SOP also clarifies that costs incurred in developing internal-use computer software during the application development stage should be capitalized, as should costs to develop or obtain software that allows for access or conversion of old data by new systems. The statement says training costs are not internal-use software development costs and should be expensed as incurred. When the SOP was exposed, there was some concern the draft would not receive sufficient attention because companies affected by it might be unaware of its significance. According to Noll, however, AcSEC received about 130 comments and numerous calls about the SOP. For information on the tax implications of internal-use software, see "Internal-Use Software and the Research Credit". To order the SOP, call the AICPA order department at 800-862-4272. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion