Development costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways?
A) All software development costs should be recorded as R&D expense.
B) All software development costs should be capitalized.
C) All software development costs should be recorded as R&D expense until technological feasibility is established.
D) All software development costs should be recorded in R&D expense until the product is available for general release to customers.

Question

Quizplus · Accepted Answer

According to accounting standards, development costs related to computer software to be sold, leased, or otherwise marketed should be recorded as research and development (R&D) expense until technological feasibility is established. After that point, further development costs can be capitalized.

Development Costs Related to Computer Software That Is to Be