📏CPA EXAM PREP

Software and Research and Development Co

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Question

Why are ongoing cloud hosting fees expensed?

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Answer

They are recurring service costs.

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Question

When does an internal-use software cost get capitalized under ASC 350-40?

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Answer

During the application development stage only.

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Question

What is the general GAAP rule for R&D costs under ASC 730?

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Answer

Expense them as incurred.

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Question

Why are software development costs usually not treated under ASC 730?

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Answer

Software follows ASC 350-40 or ASC 985-20 instead.

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