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US-Gaap Question in regards to software companies

Hi,

I hardly know much about US-GAAP, so please bear with me in case the question is too easy.

I'm working for a software company reporting in US-GAAP. The last times I hear the the following statements quite often:

  1. If version 2 of our software had that feature, we can't drop it in version 3 (even though no one uses that features) because of US-GAAP.

  1. If we want to test our new features at a customer we have to call it a pilot if the product is completely new. A beta shipment if it extens some existing software. You guess it - because of US-GAAP.

Is something like this really described in US-GAAP? Does US-GAAP have specific requirements for different industries? Like here software industry? Where is US-GAAP described (for the software industry)?

Thanks!

KH

Reply to
Hugo
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you don't specify the type of software but in general, US GAAP "generally accepted accounting principles" does not address different industry standards or software functions. There is not a "GAAP" for the software industry, only general accounting principles for recording financial transactions. But there are industry guides published by the AICPA for auditors and there are "ISO" guidelines that address some types of software.

Reply to
John

"Hugo" wrote

It probably has to do something with GAAP rules about capitalizing of the expenses. Some of what you are questioning might be R&D expenses. GAAP addresses when something has to be capitalized, and that's probably what their concern is all about - although GAAP shouldn't drive advances or improvements in the business. You make those moves because it's good for the software, which is good for the customers, which is good for the business, which is good for the shareholders.

Reply to
Paul Thomas, CPA

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