![]() ![]() If the cost of one copy of the software is more than $100,000 then it is considered tangible. ![]() It would not include a software solution used in their warehouses to keep track of inventory.Īnother criteria to determine if it is a tangible or intangible asset is the cost of the software (to either buy or develop in house). An example, would be the software that companies like Snapfish or Shutterfly use for their customers to generate various photo products that result in revenue for their businesses. There are exceptions where software is actually deemed to be a tangible asset.Īccording to various accounting standards, if software is used to deliver goods and services it can be classified as a tangible asset. So, it must be intangible, right? Not necessarily. It is not a physical material or substance. Most would consider software as an intangible asset. ![]() However, it still needs to be broken down further as a tangible or intangible asset. If software is considered to be an asset, it will be found as a line item on the balance sheet. Should software that is used within the organization be considered an asset or an expense? This question could be debated over and over depending on who is part of the conversation. Especially CFOs who talk in terms of where it falls on the organization’s financial statements. When thinking about software value, most of us immediately think in terms of dollars and cents. ![]()
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