Comment by eldavido
3 years ago
As someone who's taken a couple semesters of college-level accounting, and filed my corporate taxes correctly many years without audit (but am not an accountant/CPA), this seems broadly correct.
I'm actually surprised people are freaking out about this. Of course software is R&D. And of course you don't just get to expense it all at once. It's long-lived, like you said.
Maybe we could have some tax breaks like our friends over in real estate, but I very much think the base assumption should be that software dev is capitalized.
I don't know why you're saying "of course you don't" when it's been that way every year until now.
People are freaking out because it's a gigantic change that there wasn't any awareness around.
R&D spending used to be ridiculously privileged - you could operationalize your loss and in some cases still capitalize the transferrable portion of the resulting assets. People don't really understand that. However, this kind of accounting makes things like government grants work, so it's not exactly good that it changed this way.