If you were responsible for implementing ABC at your firm, a big undertaking for sure, how would you treat the costs involved? There would be the purchase and installation of the software and related equipment and then training for the staff, preferably by the vendor or a consultant who knows the system. The costs could be substantial and material. Would you expense them directly to the income statement or would you capitalize them (all or some?) on the balance sheet and then amortize over time?

Is there a GAAP rule that would dictate how we handle such costs?

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When implementing ActivityBased Costing ABC at a firm the costs involved in purchasing and installing the software as well as training staff can indee... View the full answer