Video: Software Costs Overview and Objectives

In this lesson, Nick Palazzolo, CPA, unpacks the complexities of accounting for software costs, focusing on the nuances between capitalizing and expensing such costs. He delves into the different scenarios a company might face, like developing software for its own use versus creating software to be licensed to other companies. Nick clarifies the criteria important for determining whether to expense or capitalize, and explains how these decisions align closely with the guidelines for research and development costs. Additionally, he covers how to handle the subsequent amortization of capitalized software costs, ensuring a clear understanding of their impact on the balance sheet.