Software License Agreement Accounting Treatment

This fee allows the use of the software for the duration of the subscription. With a subscription, you lye the software and don`t own it. In deciding which software to purchase, managers typically consider qualitative factors such as the characteristics and functions of the software, the reputation and brand name of the software vendor, the level and quality of post-implementation support, and compatibility with existing business data and systems. Although software as-a (SaaS) agreements are becoming increasingly popular, many managers prefer, in certain situations, to acquire an open-ended or temporary software license on-site. A company should capitalize on the cost of computer software designed or maintained for internal use during the development phase of the application. . . .