Software License
This query is : Resolved
28 February 2009
Is it compulsory that software licenses purchased needs to be capitalized. If the company discloses in the notes that software licences are written off in the year of purchase, will this note suffice ?
28 February 2009
THERE IS DIFFERENCE BETWEEN CAPITALIZING & WRITING OF FULLY AS COMPARED TO EXPENSING OUT.
IN 1ST CASE, U CAPITALIZE & ARMOTIXE. IN 2ND CASE U ARE CHARGING DIRECTLY TO EXPENSE
AS REGARDS UR QUERY, WHETHER SOFTWARE NEEDS TO BE CAPITALIZED WILL DEPEND ON UTILITY GIVEN BY SOFTWARE.
NO SOFTWARE IS SIOLD. LICENSE IS SOLD. SO, FOR EX: SAP SOFTWARE LICENSE IF PURCHASED WILL BE CAPITALIZED. BUT MS OFFICE LICENSE CAN BE EXPENSED OFF
IN 1ST CASE, U CAPITALIZE & ARMOTIXE. IN 2ND CASE U ARE CHARGING DIRECTLY TO EXPENSE
AS REGARDS UR QUERY, WHETHER SOFTWARE NEEDS TO BE CAPITALIZED WILL DEPEND ON UTILITY GIVEN BY SOFTWARE.
NO SOFTWARE IS SIOLD. LICENSE IS SOLD. SO, FOR EX: SAP SOFTWARE LICENSE IF PURCHASED WILL BE CAPITALIZED. BUT MS OFFICE LICENSE CAN BE EXPENSED OFF
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