Software Costs Flashcards
What is the process for capitalization of software costs?
(1. )The annual amortization shall be the greater of the amount computed using:
a. The ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product, or
b. The straight-line method over the remaining estimated economic life of the product including the period being reported on.
(2,) Then you take the greater of the above item and compare against NRV and take lower of the two,
If a computer software arrangement has an agreement to deliver software that requires significant production, modification, or customization of software, what method of accounting should be used to recognize the revenue from the contract?
% of completion method
