Accounting for Software - Internal Use & External Sales (Text Based)

This course provides an overview of the accounting for software, including both internal-use software as well as software that will be sold to third parties.  The accounting, reporting, and disclosure requirements related to software depend on the nature of the software, and whether it will be used internally by an entity or will be marketed to its customers.  For internal-use software, the guidance is prescribed by ASC Topic 350-40.  On the other hand, the guidance related to the software to be marketed and sold is prescribed by ASC Topic 985-20.

Learning Objectives:

1. Distinguish between software that is considered internal-use and not considered internal-use

2. Recognize how implementation costs are accounted for in various stages of software development

3. Identify when capitalization and amortization should commence

4. Recognize how implementation costs of hosting arrangements are accounted for differently

5. Recognize software that is within the scope of ASC Topic 985-20

6. Identify how software costs are recorded prior to and after establishing technological feasibility

7. Recognize how amortization is recorded for capitalized software costs

8. Identify general disclosure requirements related to software for resale