ACCOUNTING FOR COMPUTER SOFTWARE COSTS

Hundreds of thousands of companies all over the world use computers, with different software products and other useful applications. Nowadays, businesses need these modern tools. In the current digital economy, where information technology serves as a central pillar of competitiveness and innovation, the accounting treatment of costs associated with the development, acquisition, and use of computer software has become a critical topic in both academic literature and professional practice. The costs related to computer software have distinctive characteristics compared to traditional assets, especially due to their intangible nature, short life cycle and considerable involvement of research and development processes. This paper aim to conduct an analysis of the accounting regulations applicable to software costs, in order to identify the acounting treatment for the costs of software purchased and internally generated in companies. In accounting, the software created by the entity or purchased from third parties for its own use is included in intangible asset category. Research results comprise recognition, initial valuation and accounting of the internally generated software.