USA appropriate depreciation life for an ERP software


Mia

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I would like to know what is an applicable depreciation life (Internal book) for new ERP software. My current company uses three years for internal book; however, our IT director asked for longer depreciation life. I would like to know what is everybody company uses.

Thanks in advance.
 
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kirby

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So the total amortization over the life of the software will be the same, IT person just wants to reduce IT "dept" costs. IT person does not understand "sunk" costs. Oh well. First look at if the software is leased or owned. If leased then the amort has to match the lease term. If owned, then your acctg policy applies. I'd stick with 3 years as the technology changes about that quickly.
 

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