Firms treat expenditures to develop intangibles internally as assets under U.S.GAAP when _____ the point of technological feasibility; and under IFRS when _____ the point of technological feasibility.
A)software development costs are incurred after; development costs are incurred generally after
B)software development costs are incurred after; development costs are incurred generally before
C)software development costs are incurred before; development costs are incurred generally before
D)software development costs are incurred before; development costs are incurred generally after
E)none of the above.

Question

Quizplus · Accepted Answer

Under U.S. GAAP, firms capitalize software development costs after the point of technological feasibility. Under IFRS, firms can capitalize development costs (including those for intangibles) after demonstrating the project's technical feasibility and ability to generate future economic benefits, which generally aligns with costs incurred after the point of technological feasibility.

Firms Treat Expenditures to Develop Intangibles Internally as Assets Under