The cost associated with the development of software is capitalized after the technological feasibility is reached and is subsequently amortized over the life of the product.Īnother important asset or factor for the organization includes revenue from licensing agreements with corporate license programs and original equipment manufacturers. shortly before the products are ready for production. The cost associated with the development of software is expensed until the technology feasibility is achieved i.e. The research and development expense includes payroll, employee benefits, costs associated with programming and third-party development, cost associated with converting software for foreign markets, amortization related to purchased software and service content. The frequent transactions undertaken by Microsoft involves research and development, and sale of licenses to customers. The organization manufactures and sells computer software and provides licensing support to software users. based Technology Company and headquartered in Redmond, Washington. The case report analyzes the accounting policies adopted by Microsoft in order to examine whether the organization’s reported earnings are true and reflects the economic performance of the organization. Microsoft – Accounting Analysis Case Study Help
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