Accounting treatment for UAT expenses incurred on new softwa

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harpreet singh (Querist)
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05 November 2009 We have developed the new softawre by hiring some resources. But before putting the software live, we engage some external agency to do the UAT. So that it can be ensured that it is free from any deficiencies.

Now my query is that whether we should capitalised the UAT expenses incured or expenses out.

CA.Ramkrishna

CA.Ramkrishna (Expert)
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07 November 2009 Yes. The UAT expenses has to be capitalised.

any expenses incurred in relation to assets to bring it to working condition till it is put to use has to be capitalised. (Refer AS-6)