Can New Software Costs be Capitalised ?

[Max Stokes]

A small (ish) business (T/O c£1Million) i am associated with has capitalised £5k of New Software costs. Is this allowable? shouldn't it be recognised as revenue expenditure in the year it occurred.?

In a fast changing environment how long can the useful life of any piece of software be ?

 

[bklynboy]

Its capitalized - we use 3 years as useful life but that depends on each companies policy. Logic is you benefit from that software over time and therefore its an asset that amortizes over the period you benefit/use it.