Under GAAP, certain software costs can be capitalized, such as internally developed software costs. Based on the useful life assumption of the asset, the asset is then expensed over time until the asset is no longer useful to the company in terms of economic output. There are strict regulatory guidelines and best practices for capitalizing […]
Category Archives: Bookkeeping
Capitalizing is recording a cost under the belief that benefits can be derived over the long term, whereas expensing a cost implies the benefits are short-lived. Heavy goods like vehicles, machinery are often leased instead of directly buying them. Leasing requires less financing because it is similar to renting, which is suitable for borrowers with […]