Intangible Asset developed Internally - IFRS vs GAAP product, software, developed, only

fructify

Hi guys,

I am new to this forum. Preparing for my CFA Level 1 for the December paper.
Now I'm on the chapter for "Long-lived Assets".

Getting confused over IFRS and GAAP recognition for "Intangible Assets Developed Internally" for software development cost.

The part that I'm confused about is, for IFRS, software development costs:
- will it be capitalized or
- will it be expensed first then capitalized after the product's technological feasibility is established? (or does this only applies to GAAP?)

Jolyn

Jolyn

For IFRS: Development costs are capitalized when technical and economic feasibility
of a project can be demonstrated in accordance with specific criteria. Some of the stated criteria include: demonstrating technical feasibility, intent to complete the asset, and ability
to sell the asset in the future, as well as others.
If a company uses the software for internal use it may capitalize the development costs under US GAAP.