Computer Software Developed for Internal Use | Becker

Accounting Dictionary

Computer Software Developed for Internal Use

Under U.S. GAAP, the cost of computer software developed for internal use only is divided into categories, and the accounting for each category is different. Cost incurred during the preliminary project state and cost incurred for training and maintenance are expensed. Cost incurred after the preliminary project state and for upgrades and enhancements, including the direct cost of materials and services, the cost of employees directly associated with the project, and interest cost incurred for the project are capitalized.

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