Software Taxation: A New NAA Research Study
Article Abstract:
Little information is readily available on any aspect of accounting for software. The National Association of Accountants (NAA) is completing a study on the topic. Hardware and software were divided into separate industries in 1969. As of late 1983, thirty-three states are assessing sales tax on software that is prewritten. Custom programming is still considered a service. Inconsistency in definition of software is part of the problem in determining how to account for its costs. software qualifies for an investment tax credit when the cost of the software is included with the cost of the hardware. Research and experimental expenditures normally must be capitalized but the Internal Revenue Service (IRS) code allows for special tax accounting methods if they are consistently followed. A new credit designed as an incentive to increase research expenses will probably not be easily used for software development, as the regulations have a stricter standard for software than any other research activity.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1984
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Why can't accountants deal with uncertainty about enterprise continuity?
Article Abstract:
Accounting standards fail to adequately account for uncertainty. This is noticeable in accounting requirements that mandate the expensing of research and development costs in the periods that they are incurred (due to an inability to quantify future benefits and profit from such industrial research activities) and those that require all auditors to view audit clients as either firms that will go bankrupt or firms that will continue into the future forever. These latter, 'going concern', accounting problems are addressed. Rather than making judgments about a company's going concern attributes, accountants should be allowed to form opinions based upon the 'temporal continuity' displayed by a corporation. This innovative concept (temporal continuity) is discussed in contrast to traditional going concern concepts.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1986
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NAA Research
Article Abstract:
Two surveys on software accounting showed that most public and private companies capitalize purchased software. Most use the straight line method over five years or less. Software constructed for internal use was expensed. Two out of three user companies capitalize systems, but only one in ten capitalize internally constructed systems. Those expensing software often cite uncertain realization as a reason for not capitalizing costs. Other survey results are included.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1984
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