[msands101]

We internally develop our own software. We amortize the cost over a 3 year period. We have never written off zero balance assets. We are continually improving our software. Our auditors advised that we need to begin writing off the fully amortized assets. My questions are these: can we write off all assets from a particular year? So, say everything from our first year of operation, and each year write off the following year? Can we write of the primary purchase of software that is fully amortized but that which we continually improve upon and the improvements are not yet fully amortized? Can we for all intents and purposes write off as we see fit as long as it makes sense and we are consistent? Any guidance on this? I've tried to find guidance on fasb.org but haven't found anything concrete.

[jerileycpa]

1. Yes, you can write off assets from a particular year if they are fully amortized. If they aren't, only if they have been disposed of.

2. I'm not sure about purchasing software and then improving it. But with other fixed assets, if you make an improvement to something, you are adding to its basis and its useful life and that extends the depreciation time. You wouldn't write off any portion of the asset until it was fully depreciated or unless you disposed of the whole thing.

3. Again, you would only write off something if it was fully amortized or had been disposed of. But yes, if it makes sense for your business you can do most anything you want for accounting purposes.

Are you a public company or are you required to produce GAAP financial statements?

[paraclete]

If the asset is still in use you should not write it off, but any other asset which is no longer used should be written off.