All other things equal, a company that capitalizes rather than expenses software development costs, will have a less volatile net income.

Question

Quizplus · Accepted Answer

Capitalizing software development costs means spreading these costs over their useful life rather than expensing them all at once. This approach smooths out expenses over several years, leading to less volatility in net income compared to expensing them immediately.

All Other Things Equal, a Company That Capitalizes Rather Than