Thursday, February 4, 2010

How Are Software Development Costs and Research and Development Costs Capitalized

Under U.S. GAAP, research and development costs are expensed as incurred. Under IFRS, research costs are expensed as incurred and development costs are capitalized.

Costs incurred to develop software for sale to others are expensed as incurred until the product's technological feasibility has been established. Once technological feasibility has been established, subsequent costs are capitalized.

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