Software Development Costs.

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Rachel
Rachel Registered Posts: 348 Dedicated contributor 🦉
in General accounting discussion
Hello sorry if these sound stupid questions, I am just trying to get a few things clear in my head, I think I know the answers but I thought a few friendly people to bounce my thoughts of would help.

Software development costs - work in progress, can these be capitalised, the cost just relate to one product.

Directors loans to company, do I need details of each loan (invoices paid personally) or can I total.

Thank you in advance

Rachel

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  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    Anyone?
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624 Beyond epic contributor 🧙‍♂️
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    Development costs can only be capitalised if they meet the criteria of the accounting standard. I've always used the PIRATE acronym to remember it.

    Are you reporting under international or UK standards?

    Directors loan can be totalled on the note to the accounts but you should have a breakdown as to how it has been made up in your possession.
  • Rachel
    Rachel Registered Posts: 348 Dedicated contributor 🦉
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    Thanks for your response.

    I am using the FRSSE.

    "Expenditure on research and development is written off in the year in which it is incurred".

    Can someone just confirm to me that the development of a new software product falls under this. The product i 65% complete and has incurred costs of £20000 approx.

    A few years ago I worked for a software company and it was classified as WIP.

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