This course covers the accounting for costs of software that’s developed to be sold, leased, or marketed, based on the guidance in ASC 985-20. We’ll focus on how to assess technological feasibility and why it matters when deciding whether software development costs should be expensed or capitalized. The course also walks through the related reporting and disclosure requirements under GAAP.
Publication Date: April 2026
Topics Covered
- Scope
- Technological Feasibility
- Costs Incurred After Technological Feasibility
- Production Costs
- Inventory Costs
- Purchased Software for Resale
- Funded Software Development Arrangements
- Amortization of Capitalized Costs
- Impairment Considerations
- Future Product Enhancements
- Financial Statement Presentation Requirements
- Disclosure Requirements
Learning Objectives
- Distinguish between internal use software and software to be sold
- Recognize software that is within the scope of ASC Topic 985-20
- Identify how software costs are recorded prior to and after establishing technological feasibility
- Recognize how amortization is recorded for capitalized software costs
- Identify general presentation and disclosure requirements related to software for resale
Level
Overview
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Kelen Camehl
Kelen is a recognized author and reviewer of CPE courses and has authored over 145 courses (350 CPE credit hours) covering a range of accounting, auditing, financial reporting, regulatory, and ethics topics. His courses are available for purchase from many online CPE providers including the AICPA. Kelen remained involved in CPA exam content development for nearly 10 years and authored more than a thousand multiple choice questions for various sections of the CPA exam. He also serves as an Editorial Advisor for the AICPA’s "Journal of Accountancy".
Kelen has nearly 20 years of progressive finance and accounting experience. He currently serves as an Accounting Policy Advisor with HP. Prior to HP, he served in multiple accounting roles in the oil & gas industry with ConocoPhillips including technical accounting policy, SOX compliance, and internal audit. He also gained public accounting experience with PricewaterhouseCoopers, working with various clients in the energy, electric, power, gas, and utility sectors.