FASB rules allow a company to record amounts spent developing software to be recorded as an asset after the project has reached the stage of “technical feasibility.” Any software assets have to be amortized over the expected life of the software product. Both Alpha Corp. and Beta Corp. spent $120 million on a project in 2014, and developed products with a useful life of three years. Alpha says that technological feasibility was reached very late, and expenses the $120 million. Beta says technological feasibility was established early, and records all $120 million as an asset. Assume both companies start selling their product on January 1, 2015.

A. What expense will Alpha record:

a. In 2014

b. In 2015

c. In 2016

d. In 2017

e. In total, from 2014 through 2017?
B. What expense will Beta record:

a. In 2014

b. In 2015

c. In 2016

d. In 2017

e. In total, from 2014 through 2017?
C. Which method is more conservative?