Hi:

I have a promotional products company and I use graphics software for the business. Is software like this a fixed asset or an inventory (non-sale) item? Thank you

You can put it under Fixed Assets, under “Computer hardware and software” or another account name of your choice.

A Fixed Asset is an asset that is used to produce income AND is not expected to be consumed or converted to cash within 1 year.

Inventory is merchandise intended for sale.

Since this software is a non-sale item, it is definitely not inventory.

Normally you would expense software anot put it as an asset because software is regularly updated and more advanced software comes out therefore it is not something you would depreciate