Software development cost

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kiran mannuru (Querist)
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10 October 2016 Respected Expects,
I need some clarity about treatment of software development cost-Held for sale.
Development period is 2015-17
whether development cost to be charged to P &L Account or to be capitalised and amortized over a period of time..Our entity is a pvt Ltd Company
Do this needful favour..Thank you.

Anand

Anand (Expert)
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13 October 2016 your query is not clear. If its a software going to be sold then the cost needs to be kept in WIP until the product is finsihed. Once finsihed entire amount will go to the P&L and sale value will be credited whenever sold.
on the other hand if its for your own use, you will have to amortize under the head Depreciation as per rate available in schedule.