It doesn’t do anything about many of the thorniest current accountancy issues surrounding that nebulous stuff, software, but the American Institute of Certified Public Accountants is proposing a new rule that would at last standardize how US companies must account for their internal software expenses. The proposed rule would require companies to amortize the costs of software they use internally over time, instead of immediately taking a hit against earnings when they buy a new suite, as some companies now do. Companies also would be able to amortize the costs of upgrading their software, and the aim is to get everybody treating the stuff the same, the Wall Street Journal notes. Companies would have to write off any money spent on training in use of internal software at the time, and if a software project turns out to be a dead end, the cost will have to be taken immediately. Under the proposal, it is thought that companies would be much less chary about investing in new software. The US Financial Accounting Standards Board is due to review the proposed new rule shortly.
