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Why the firm does not capitalize any software development

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Reference no: EM131119022

In practice, very few firms capitalize costs of developing computer software. However, Statement No. 86 requires that firms capitalize (and subsequently amortize) development costs once the "technological feasibility" stage of a product is reached. Review the Adobe Systems illustration in the chapter (Example 5) and discuss why the firm does not capitalize any software development costs.

Reference no: EM131119022

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