Situation Scientific Software sells software to the oil industry. Its policy is to recognize revenue when it signs a licensing agreement for the software. It uses a 13-year amortization period for the software products it capitalizes. The president has asked you to evaluate these revenue recognition and amortization policies.

Directions
1. Research the related generally accepted accounting principles and prepare a short memo to the president. Cite your references and applicable paragraph numbers.
2. Why do you think the company might have selected a 13-year amortization period?