Is the cost of QuickBooks a prepaid expense? Fixed Asset?

USA Discussion in 'General Accountancy Discussion' started by Lauren W, Dec 1, 2018.

  1. Lauren W

    Lauren W

    Feb 12, 2018
    Likes Received:
    California, USA
    We purchased our new license for Quickbooks this month, and I'm trying to determine if it should all be expensed now, classified as a prepaid expense, or classified as a fixed asset and depreciated? I believe the license is good for 3 years, however it has no residual value that I know of once purchased (eg if the business should close before that 3 years is up, the license can't be resold to recoup a portion of the expense). The amount of purchase is over our usual threshold for prepaid expenses/fixed assets. How have y'all been classifying this when purchased?
    Lauren W, Dec 1, 2018
    lokeshqbtech likes this.
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  2. Lauren W

    kirby VIP Member

    May 12, 2011
    Likes Received:
    We book under "Fixed Assets- Software" and depreciate it fully. In your case, term would be 3 years and straightline method.
    kirby, Dec 3, 2018
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