Green Earth Corp. has capitalized software costs of $450,000 on a product to be sold externally. During
Fantastic news! We've Found the answer you've been seeking!
Question:
Green Earth Corp. has capitalized software costs of $450,000 on a product to be sold externally. During its first year, sales of this product totaled $195,000. Green Earth expects to earn $1,250,000 in additional future revenue from this product, which is estimated to have an economic life of four years. Green Earth is considering capitalizing and amortizing the software based on when the revenue is expected to be generated. Comment on the appropriateness of this approach assuming Green Earth uses IFRS.
How would your answer differ under ASPE?
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0073527062
9th Edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
Posted Date: