Impact Systems Inc. has recently designed and developed its own payroll system intended for internal use. If there is a market, the company may also decide to sell it to outside companies. Work on this project was completed over an 18 month period. The following costs were incurred in development of the software:

Conceptual design work ..........................................................................................    $ 6,400

Evaluation and decision on alternative options ...................................................       8,200

Evaluation and consideration software requirements for options ...................     19,000

Final selection of option ..........................................................................................       4,600

Software design work ..............................................................................................  100,000

Software coding ........................................................................................................    56,000

Testing of software ..................................................................................................    24,000

Data conversion costs information from old system ..........................................    16,600

Staff training on new software ...............................................................................      4,200

Allocation of general and administrative costs ....................................................    17,600

Ongoing software maintenance .............................................................................      9,000

Required:

1. Indicate how much would be accounted for as an intangible asset for software. Explain why a cost is included or not included.

2. Are software costs always classified as an intangible asset? Explain why or why not.