Why firm does not capitalize any software development costs

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CAPITALIZATION OF SOFTWARE DEVELOPMENT COSTS. In practice, very few firms capitalize costs of developing computer software. However, Statement No. 86 requires that firms capitalize (and subsequently amortize) development costs once the "technological feasibility" stage of a product is reached. Review the Adobe Systems illustration in the chapter and discuss why the firm does not capitalize any software development costs.

Text Book: Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective By James Wahlen, Stephen Baginski, Mark Bradshaw.

Reference no: EM13902180

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