PDA

View Full Version : What does GAAP say about accounting for software licenses?


ezullo
May 20, 2010, 07:21 AM
I need to know the rules for accounting for software licenses

morgaine300
May 20, 2010, 11:53 PM
Software isn't exactly well covered. First, you need to decide if the cost is high enough to warrant capitalizing it at all. Generally companies have a price point under which they just expense stuff, and over which they capitalize.

It may also depend on whether the lease is actually ongoing or just good for a year. Probably the longest life software is going to be considered to have is about 3 years, so you can amortize it over that life, unless the lease period is actually shorter and then you would use that.