Accounting for Software to be Sold or Licensed - What Every CPA Needs to Know
Author: Kelen Camehl
| CPE Credit: |
2 hours for CPAs |
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
