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5. Capitalized costs incurred to develop software for internal use is amortized using which method of...

5. Capitalized costs incurred to develop software for internal use is amortized using which method of amortization? a) Which ASC answers this question? b) Which amortization method is recommended?

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Answer #1

Solution:-

a) Which ASC answers this question:-

ASC 350-20

b) Which amortization method is recommended:-

Straight-line approach

Explanation:-

The costs of software developed internally and for internal use only, the method to ammortize the cost is through the useful life of the asset. The amount to be ammortized will be after deducting the residual value if any. Stright line should be used to amortized Capitalized costs incurred to develop software for internal use.

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