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For internal use software, there are three stages defined by accounting guidance: 1) preliminary project phase (i.e. planning, evaluating alternatives, conceptual formation); 2) applicationdevelopment (i.e. Internal and external costs incurred during the preliminary project stage shall be expensed as they are incurred.
“Issues in Software Cost Estimation,” Abedallah Zaid, Mohd Hasan Selamat, Abdual Azim, Abd Ghani, Rodziah Atan, Tieng Wei Koh, “Management Accounting – Enterprise Performance Management,” Group?IV, 15, The Institute of Cost and Works Accountants of India, 2010. Evaluating Project Decisions,” INTAVER Institute.
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