Computer Software Costs

Question 1

Once the software has reached ______ ______ an entity can capitalize the costs related to the internal development of the software.

Answer 1

Technological feasability

Question 2

Technological feasibility is defined as…?

Answer 2

The point when the program or model is complete, but the product is not yet on the market

Question 3

Amortization of software costs is the greater of SL amortization or ((current revenue/expected revenue) x cost). TF

Answer 3

True

Question 4

GAAP requires software costs be capitalized immediately. TF

Answer 4

False, expensed until the point of technological feasibility is met

Question 5

IFRS requires software costs related to research to be expensed, and those related to development to be capitalized. TF

Answer 5

True

Question 6

If NRV is less than capitalized cost - amortization, then NRV is reported as the net capitalized cost. TF

Answer 6

True and vice versa