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BGM,
I don't see a typo with regards to Cerner's note on expensing costs prior to tech feasibility; they've just reworded the Fasb ruling.

Fasb 86...costs incurred internally in creating a computer software product shall be charged to expense when incurred as research and development until technological feasibility has been established for the product. Technological feasibility is established upon completion of a detail program design or, in its absence, completion of a working model. Thereafter, all software production costs shall be capitalized and subsequently reported at the lower of unamortized cost or net realizable value. Capitalized costs are amortized based on current and future revenue for each product with an annual minimum equal to the straight-line amortization over the remaining estimated economic life of the product.

Note:
To meet capitalization requirements, the software being developed must be: 1) intended to be sold or leased (not used internally), 2) must have reached a stage in development wherein it's been coded and tested and all new/novel/unproven functions have been worked out to the point where it is known that it can be done (technological feasibility).

Amortization starts when the product reaches general release, not the beta testing stage, to customer(s). Amortization period is the economic useful life of that particular product, using straight line. I believe you're supposed to review economic useful lives annually, so impairment shouldn't be as much of an issue.

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I am not familiar with Cerner, but their mentioning that solutions AND enhancements are capitalized and that many of their solutions are used for decades or more says to me that that's the one basic difference between them and a MSFT-type company - very high dollar, custom development, spread over a longer time period, with customer requested enhancements and varied release dates - not your set price every two years type of upgrade, where there is no potential for the cost of the upgrade to exceed the upgrade revenue (pricing of the upgrade being set by the cost of the upgrade, not a contract).
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