Abstract: A group of former CEO's of computer software product and services companies discussed various ways in which accounting practices evolved in their industry and how these practices impacted their business decisions. They discussed sales tax, capitalization of software, valuation of intangible assets and revenue recognition. They talked about the chart of accounts, financial ratios and SIC codes. They spoke of participating in ADAPSO Roundtables and the concern not to be collusive on pricing or related matters. Raising capital without being able to show any balance sheet assets led to R&D partnerships and the successful attempt by ADAPSO to get FASB to permit capitalization of certain software development costs by the software vendors. They also discussed the differences in the accounting treatment between acquisition of other companies with their products and services from the treatment of internal development costs of products and establishing of new service locations, all favoring buying assets versus building them. They closed the session by reviewing various ways that the accounting practices did not represent fiscal reality but, unfortunately, influenced business management and investment decisions and required that they set up set up separate records for management planning and operational control.

Accounting Issues Workshop PDF

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