McGee, Robert W. (1986) Accounting for software in the United States. PhD thesis, University of Warwick.

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Abstract

This thesis represents the first major research to be completed
either in the United Kingdom or the United States on the subject of
accounting for software. Part I concentrates on the financial aspects
of software accounting, and consisted of in-person interviews with a
number of individuals from software' vendor and user companies who
are knowledgeable about software accounting. The interviews were
followed by two mail questionnaires, one each to software vending
company executives and software user company executives. The
NAARS database was also used to determine how software accounting
policies are disclosed for these two types of company. It was
concluded that more than one policy exists in practice. While
approximately 90% of the companies surveyed expense internally
constructed software, about two-thirds capitalize the cost of
purchased software. Reasons given for individual company policy
seem to be based on expediency rather than good accounting theory.
The interviews and questionnaire responses in Part I seemed to
indicate that software vendor companies that capitaliize software
find it easier to raise debt and equity capital than do companies
which expense software costs. Part II presents the results of two
questionnaires that were mailed to bank lending officers and one
questionnaire that was mailed to financial analysts for the purpose of
obtaining more information on this point. It was concluded that
companies that capitalize software costs find it significantly easier
to obtain bank loans than do companies that expense software costs.
The effect on stock price was less clear cut, although the
questionnaire responses did indicate that a company's software
accounting policy does influence the value a financial analyst places
on a company's stock.
Part III discusses the United States federal and state tax aspects
of software. Thirteen appendices giving supplementary data are also
included.

Item Type:	Thesis or Dissertation (PhD)
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting Q Science > QA Mathematics > QA76 Electronic computers. Computer science. Computer software
Library of Congress Subject Headings (LCSH):	Computer software -- Accounting
Official Date:	April 1986
Institution:	University of Warwick
Theses Department:	School of Industrial and Business Studies
Thesis Type:	PhD
Publication Status:	Unpublished
Supervisor(s)/Advisor:	Fawthrop, Roger A.
Sponsors:	National Association of Accountants
Extent:	3 volumes
Language:	eng

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