Software development costs are capitalized if they are incurred:
A)Prior to point at which technological feasibility has been established.
B)After commercial production has begun.
C)After technological feasibility has been established but prior to the product availability date.
D)None of these is correct.

Question

Quizplus · Accepted Answer

According to Generally Accepted Accounting Principles (GAAP), software development costs can be capitalized only after the technological feasibility of the project has been established. Once technological feasibility has been established, and development costs start to be incurred, only costs incurred up until the product availability date can be capitalized. Therefore, choice C is correct. Choices A and B are incorrect because they refer to periods before or after the window of time during which costs can be capitalized. Choice D is incorrect because choice C is correct.

Software Development Costs Are Capitalized If They Are Incurred