Tell me about capitalizing software development costs.

I couldn't find specific podcast clips discussing the capitalization of software development costs directly. However, I can provide a general overview based on expert discussions in the field.

In accounting, capitalizing software development costs involves recording these expenses as an asset on the balance sheet instead of an expense on the income statement. This is usually done when the software is intended for internal use or when it generates future economic benefits. Here are the key points:

1. Eligibility for Capitalization:

   • Costs incurred during the application development stage can often be capitalized.
   • Examples include costs for coding, testing, and unique software configurations.

2. Types of Costs:

   • Direct costs such as salaries of developers, costs of software licenses directly tied to development, and overhead costs can typically be capitalized.
   • Maintenance and training costs should generally be expensed as incurred.

3. Amortization:

   • Once the software is placed into service, the capitalized costs are amortized over the useful life of the software.

4. Financial Reporting Standards:

   • Companies must adhere to specific accounting standards (like GAAP in the U.S. or IFRS internationally) that provide guidelines on when and how to capitalize these costs.

For detailed insights or case studies, you might look into accounting or finance-focused podcasts, as they often cover these topics comprehensively.