A company that prepares its financial statements according to International Financial Reporting Standards (IFRS) must calculate amortization of capitalized software development costs in the same way as under U.S. GAAP.

Question

Quizplus · Accepted Answer

IFRS and U.S. GAAP have different requirements for accounting for capitalized software development costs. Under IFRS, these costs can only be capitalized in certain circumstances, and amortization must be calculated using the straight-line method or another appropriate method. Under U.S. GAAP, the costs can be capitalized more readily and amortization can be calculated using the straight-line method, the units-of-production method, or other appropriate methods.

A Company That Prepares Its Financial Statements According to International