Accounting for Software to Be Sold or Licensed - What CPAs Need to Know (Course Id 2633)

• Who is this course for?
  This course is designed for anyone needing Continuing Professional Education (CPE), particularly CPAs and accounting professionals involved with software-related financial reporting.

• What is this course about or what problem does this course solve?
  The course addresses the accounting treatment of costs related to software developed to be sold, leased, or marketed, focusing on ASC 985-20 guidance and how to determine when such costs should be expensed or capitalized.

• How can the knowledge from this course be used?
  Learners can apply this knowledge to properly recognize, report, and disclose software development costs under GAAP, ensuring compliance with accounting standards.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  It equips professionals with the necessary skills to accurately account for software intended for resale, a complex area that requires understanding of technical criteria like technological feasibility and related disclosures.

• When is this course relevant or timely?
  This course is particularly relevant now, as it was released in 2025 and reflects current accounting standards and practices, including the latest considerations for software capitalization and impairment.

• How is a course like this consumed or used?
  This is a QAS Self Study text-based course that includes reading material, review questions, and a final exam, allowing learners to complete it at their own pace online.

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.

NASBA QAS - Text - NASBA Registry - 2633

Course 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

Chapter 1 - Accounting for Software to Be Sold or Licensed - What CPAs Need to Know

Course Learning Objectives

Course Overview

Introduction

Scope

Technological Feasibility

Review Questions

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

Conclusion

Review Questions

Glossary of Key Terms