With respect to software intended for resale, costs may only be capitalized once technical feasibility is established.

Question

Quizplus · Accepted Answer

This is true. Costs related to software intended for resale can only be capitalized once technical feasibility is established. Before that point, all costs must be expensed as research and development expenses. Once technical feasibly is established, all qualifying costs may be capitalized and recognized as assets on the balance sheet.

With Respect to Software Intended for Resale, Costs May Only