Software Capitalization Thresholds

[dave1969]

Would it be improper to have a different capitalization threshold for off-the-shelf software and internally developed software?

In my opinion you could argue there should be a higher threshold for internally developed projects as you cant assume internal labor hours to hold the same value as a commercial finished product....any thoughts?

Thanks!

 

[accounting nerd]

I see small companies use the same threshold for both purchased and developed software. If it is under a certain dollar amount they just expense it right away. I think using a similar materiality threshold would be better for consistency reasons.

 

[cmesh]

Agree with accounting nerd...it's really a policy decision as long as it's consistently applied and doesn't result in a material misstatement of fixed assets or expenses.

 

[Counterofbeans]

In my opinion you could argue there should be a higher threshold for internally developed projects as you cant assume internal labor hours to hold the same value as a commercial finished product....any thoughts?

Why would you want to make that argument?