MyCIMA

Perpetual Software Licences Accounting treatment

Replies : 2

Question asked by:

Georgina Sprirrell - view profile

Hi, I was after a bit of advice on the options for the treatment of perpetual software licences.

Does anyone have a working knowledge and examples of where this can be capitalised or optionally can be expensed in year of purchase.

If capitalised as an intangible asset - any thoughts on the life of the asset?

Thanks 

 

Expense running expenses - Perpetual licensing exp

For recurring and necessary for running of business in order to generate income, it can be accounted as operating expenses under admin exp or upkeep of office equipment for licensing.

I agree

I wouldn't capitalise software licenses. Include them as an operating expense bringing in a prepayment if it covers a period beyond the year end.