Statement 86 may affect many firms' software costs

Article Abstract:

Statement 86 of the Financial Accounting Standards Board (FASB) establishes criteria for the capitalization of computer software costs and applies to both software developed internally and to purchased software. The new criteria represent a departure from the standard practice of expensing all such costs as incurred; after technological feasibility has been established for a product being developed, all software production costs must be capitalized. Statement 86 also: establishes capitalization guidelines for computer software used as an integral part of a product or process; requires that each time a balance sheet is issued, the net realizable value of each software product must be estimated; and requires certain disclosures, such as the amount of unamortized costs carried as an asset.n place that will accommodate the new guidelines; it is, therefo re, recommended that companies begin implementation planning a s soon as possible.

Standards, Finance

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How to manage your company's microcomputers

Article Abstract:

Microcomputers are becoming valuable management tools as memory capacity increases, processing speeds improve and costs decrease. Comprehensive plans to purchase personal computers and software should ensure integration with existing information processing functions and should include plans for growth. Purchasing "compatibles" may save money over name-brand hardware and offer extra features, but vendor support may be uncertain. Software purchase can be preferable to in-house programming unless no commercial product is readily available, and site-licensing can prevent legal problems for copying software. Availability of software upgrades, technical support and copy protection may influence choice of vendor. Employee training classes may be conducted by company or outside instructors. Use adequate documentation and data backup procedures, and purchase comprehensive insurance coverage to safeguard your work.

Data processing and preparation, Purchasing, Microcomputers, Equipment and supplies, Copyright, Copyrights, Licensing agreements, Employee training, Data processing, Electronic data processing

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Changes proposed in accounting for income taxes

Article Abstract:

Comprehensive allocation whereby tax expense is equal to the taxes payable in addition to the tax effects for all timing differences is favored by the Financial Accounting Standards Board (FASB) and 90 percent of accountants polled by the Board's Discussion Memorandum. A plan for wider understanding and conceptual consistency may be the mutual bonds for the major policies developed by the FASB. The major change of policy stems from the plan to replace the presently required deferred technique with the liability technique.

Laws, regulations and rules, Tax accounting, Accounting and auditing, Income tax

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