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Posted by Paul Thomas, CPA on January 16, 2008, 8:11 am
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> I hardly know much about US-GAAP, so please
> bear with me in case the question is too easy.
>
> I'm working for a software company reporting in US-GAAP.
> The last times I hear the the following statements quite often:
>
> 1.
> If version 2 of our software had that feature, we can't drop it in version
> 3
> (even though no one uses that features) because of US-GAAP.
>
> 2.
> If we want to test our new features at a customer we have to call it a
> pilot
> if the product is completely new. A beta shipment if it extens some
> existing software. You guess it - because of US-GAAP.
>
> Is something like this really described in US-GAAP? Does US-GAAP have
> specific requirements for different industries? Like here software
> industry? Where is US-GAAP described (for the software industry)?
It probably has to do something with GAAP rules about capitalizing of the
expenses. Some of what you are questioning might be R&D expenses. GAAP
addresses when something has to be capitalized, and that's probably what
their concern is all about - although GAAP shouldn't drive advances or
improvements in the business. You make those moves because it's good for
the software, which is good for the customers, which is good for the
business, which is good for the shareholders.
--
Paul A. Thomas, CPA
Athens, Georgia
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