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Plan for New Accounting Rules on Software Costs Moves Forward
U.S. companies may need to report cash amounts tied to their software expenditures, more of which would be moved off corporate balance sheets under a forthcoming proposal to update decades-old accounting rules. From a report: The Financial Accounting Standards Board voted Tuesday, 7-0, to propose re...
U.S. companies may need to report cash amounts tied to their software expenditures, more of which would be moved off corporate balance sheets under a forthcoming proposal to update decades-old accounting rules. The proposal would cover use of software ranging from enterprise resource planning systems to hosting services and mobile banking applications, meaning it applies to almost every company. Under the plan, companies would no longer have to evaluate the stage of their software project to determine whether to expense the costs on the income statement or to capitalize, or delay fully recognizing them, on the balance sheet.
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