Companies should treat software updates and some other types of intellectual property as an expense in their financial reports, global standard-setters said Tuesday as they debated how to modernize accounting for so-called intangible assets.
Intellectual property that is developed over time and then used immediately should be treated as an operating expense when used, the International Accounting Standards Board said. That would include, for example, software updates developed over months before deployment.
Typically companies account for intangibles like patents as an asset whose value can be written up or down over a longer period of time, rather than an expense. …
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