Sunshine Technology, a software development company, is contemplating a sale of the business to an unrelated third party. During the current year, Sunshine has incurred substantial amounts of research and development (R&D) costs related to some software development with a very high probability of future success. Sunshine's manager have decided to capitalize the current year's software development cost, which had techncially reached the stage of application development last year. The potential buyer howerver disagrees and informs Sunshine that R&D costs should be categorically expensed. Required: Utilize the FASB Codification to write an essay on proper accounting for R&D costs arising from software development.