"Where to put something?". Putting software on balance. Revelation chief accountant with experience
Everyone knows that in order to sell something, you need to buy something, or find it, or select it, or INVENT! This is the last thing we will analyze today. Why do we need to put the developed software (software) on the balance? Where to begin? When to stop What are the ways to sell? These and many other questions may arise from the newly inventor and his management. My name is Marina Remizova, I am a chief accountant with experience in IT companies, on whose balance sheet there is more than one IA, and I will reveal to you a secret - everything is not so bad. It was much harder to invent! Let's go along this path together.
If you are a developer, system administrator or tester, feel free to skip this article. It is unlikely that it will be useful to you. But the director or project manager will help to know the scheme of setting the software on balance for the purpose of sale. Indeed, like any other invention, the developed software wants not only to show the world, but also to sell, preferably not once, but often and often. So much so that the competitors do not piss off - do not arrogate to themselves our work and do not give for their own, and did not ask their own accounting questions.
When we buy someone else's licenses, for example, Microsoft, we do not put them on the balance, but we write them off as expenses for future periods, because we buy them for ourselves, not for sale.
In order to sell the rights to IA, which belongs to us, to others, it must be in our asset, i.e. stand on balance.
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The software is placed on the balance by the accounting department of your company, and all accounting actions are based on documents. Consider schematically the algorithm for the development and accounting of brand new software and related documents.
The General Director issues a task for developing software [computer programs] "XXX" with the aim of distributing it to third parties for profit. The director may, in this document, appoint the executors and the person responsible for the process, describe what the software will be, and sign the Task.
If you suddenly decide to sell software that you invented for yourself (let's call it “old”) - you can skip this item. You already have a finished product, which remains only to evaluate.
Do not forget already at this stage to notify your accounting department of the development plans, so that it starts to “save” the costs on a separate account. In hindsight, this will be ... not easy. You do not want to quarrel with the accounting?
I advise you not to delay the development process for a long time (more than a year) in order not to divert funds from circulation and not to overpay extra taxes.
When you consider that the product is ready for sale, you call it the first version and consider that the development is complete. This does not mean that you have run out of ideas for improvement - you are just ready to start selling. It's time to notify the CEO. The responsible person writes the following document to him - “Notice of the creation of new software” The CEO rejoices and creates an “Order of Completion”: I consider the development of new software “XXX” completed.
Instructions of the accounting department are given: to accept the XXX software on the balance and put into operation as an intangible asset (IA) with the initial value of ... rubles. Remember, accounting all this time postponed costs? This will be the book value of your software.
Next, the useful life of the intangible asset should be determined (in most cases it is a period in months during which it is planned to use the respective asset in order to obtain economic benefits). During this period, depreciation (depreciation) will be charged. The cost of the software will be written off on a monthly basis, in equal installments, during the period of its use, for example, at 1/25 of the initial cost for 25 months.
Accounts depreciation will start accruing from the next month after being accepted into the balance, and will do this every month until the end of its useful life (the depreciation period of its own software should be specified in the Accounting Policy of the organization).
Congratulations! Now you have become the owner of an intangible asset (IA), which is on your balance sheet and has the right to be sold.
The sale of rights to use the software is carried out under a license agreement. There are two options for sale - the transfer of exclusive and non-exclusive rights. What is the difference?
If you sell the rights to the same software to a wide range of people, this is the transfer of non-exclusive rights.
If you alienate exclusive rights, this means that you have given your creation once and for all, said goodbye to your brainchild, and now the buyer is the owner of your software and can do anything with it - modify, resell, rewrite the code.
If you want to sell a lot, often and to a wide range of people, sell the “Simple (non-exclusive) license for the XXX software.
If an intangible asset ceases to bring economic benefits after some time, it is subject to write-off from accounting. This can happen as a result of the expiration of the useful life, the transfer of exclusive rights under the contract on alienation (selling it to another person), etc. If depreciation on the term has not yet been fully accrued, when deducting IA from the balance sheet, it “gets” at the expense of net profit.
How much can we sell the rights to our software?
The cost of sales does not depend on the cost of software on the balance sheet. For how much you sell - the merit of your sales department, but the rights to the same software can be sold to different buyers with a difference of ± 20%
Do I need to put each new version of the created software on the balance?
A little trick, so as not to produce IA, if you are passionate about inventions or new versions: put the main version on the balance, and then write new versions and extensions later in the licensing sales contracts, separated by commas after the name of the main license.
What if new software is not for sale?
Sorry and hope. There are no additional taxes in this case.
Do I need to issue legal documents of ownership?
This has nothing to do with putting the software on the balance; it is a question of registering the rights to the product you created, and not the ability to sell it. Registration of rights lasts from 2 to 12 months, at the end you receive a certificate in your hands, which says: this is your software and you are its copyright holder.
Where to write off the cost of technical support for new software?
Technical support does not apply to software development and is charged to costs according to Accounting Policy.
How much should software cost?
It is irrational to set aside millions of dollars for this out of turnover, the cost of future software depends on your appetites, revenues and pay profit, but, in my opinion, it will be reasonable to spend no more than 3% of annual revenue on this.
How much minimal software should be created?
If you have geniuses who have written a masterpiece overnight - let this software cost 100 rubles, there is no legal restrictive framework.
Take care of your geniuses!
If after this instruction you still have (or, on the contrary, any) questions, I’m happy to prompt you, write!
If you are a developer, system administrator or tester, feel free to skip this article. It is unlikely that it will be useful to you. But the director or project manager will help to know the scheme of setting the software on balance for the purpose of sale. Indeed, like any other invention, the developed software wants not only to show the world, but also to sell, preferably not once, but often and often. So much so that the competitors do not piss off - do not arrogate to themselves our work and do not give for their own, and did not ask their own accounting questions.
When we buy someone else's licenses, for example, Microsoft, we do not put them on the balance, but we write them off as expenses for future periods, because we buy them for ourselves, not for sale.
The expression “put on the balance sheet” means, literally, to increase the asset of the balance sheet at the expense of the value of any assets.One of the assets that, undoubtedly, will decorate our balance sheet - an intangible asset (IA) is either our own handwritten software, or the one to which we have acquired exclusive rights.
In order to sell the rights to IA, which belongs to us, to others, it must be in our asset, i.e. stand on balance.
')
Where to begin?
The software is placed on the balance by the accounting department of your company, and all accounting actions are based on documents. Consider schematically the algorithm for the development and accounting of brand new software and related documents.
The General Director issues a task for developing software [computer programs] "XXX" with the aim of distributing it to third parties for profit. The director may, in this document, appoint the executors and the person responsible for the process, describe what the software will be, and sign the Task.
If you suddenly decide to sell software that you invented for yourself (let's call it “old”) - you can skip this item. You already have a finished product, which remains only to evaluate.
Do not forget already at this stage to notify your accounting department of the development plans, so that it starts to “save” the costs on a separate account. In hindsight, this will be ... not easy. You do not want to quarrel with the accounting?
“Save costs” : this means not to write off all costs, reducing your profit, but to put aside those costs that are associated with the development of this particular new software, they will constitute its future book value.What are the costs? The salary of all the executors involved in the product development, their insurance premiums, material expenses - perhaps, the purchase of licenses, without which it is impossible to create new software, customs duties, it is possible to attract subcontractors, rent an office, if the developers are sitting in a separate room, office, cartridges etc. Costs are accumulated by months, from the start of software development (from a specific date) to the end (also the exact date).
I advise you not to delay the development process for a long time (more than a year) in order not to divert funds from circulation and not to overpay extra taxes.
When to stop
When you consider that the product is ready for sale, you call it the first version and consider that the development is complete. This does not mean that you have run out of ideas for improvement - you are just ready to start selling. It's time to notify the CEO. The responsible person writes the following document to him - “Notice of the creation of new software” The CEO rejoices and creates an “Order of Completion”: I consider the development of new software “XXX” completed.
Instructions of the accounting department are given: to accept the XXX software on the balance and put into operation as an intangible asset (IA) with the initial value of ... rubles. Remember, accounting all this time postponed costs? This will be the book value of your software.
Next, the useful life of the intangible asset should be determined (in most cases it is a period in months during which it is planned to use the respective asset in order to obtain economic benefits). During this period, depreciation (depreciation) will be charged. The cost of the software will be written off on a monthly basis, in equal installments, during the period of its use, for example, at 1/25 of the initial cost for 25 months.
Accounts depreciation will start accruing from the next month after being accepted into the balance, and will do this every month until the end of its useful life (the depreciation period of its own software should be specified in the Accounting Policy of the organization).
Congratulations! Now you have become the owner of an intangible asset (IA), which is on your balance sheet and has the right to be sold.
Ways to sell your own software
The sale of rights to use the software is carried out under a license agreement. There are two options for sale - the transfer of exclusive and non-exclusive rights. What is the difference?
If you sell the rights to the same software to a wide range of people, this is the transfer of non-exclusive rights.
If you alienate exclusive rights, this means that you have given your creation once and for all, said goodbye to your brainchild, and now the buyer is the owner of your software and can do anything with it - modify, resell, rewrite the code.
• Agreement on the alienation of exclusive rights: the full alienation (assignment) of the exclusive right from the right holder to a third party occurs.The exclusive rights usually include the sale of custom software for a specific customer; more often, other customers will not need it and are not interested.
• Conclusion of a license agreement: the exclusive right is transferred to a third party only to the extent specified by the agreement, the exclusive right itself remains with the right holder.
If you want to sell a lot, often and to a wide range of people, sell the “Simple (non-exclusive) license for the XXX software.
If an intangible asset ceases to bring economic benefits after some time, it is subject to write-off from accounting. This can happen as a result of the expiration of the useful life, the transfer of exclusive rights under the contract on alienation (selling it to another person), etc. If depreciation on the term has not yet been fully accrued, when deducting IA from the balance sheet, it “gets” at the expense of net profit.
Answers to prospective questions
How much can we sell the rights to our software?
The cost of sales does not depend on the cost of software on the balance sheet. For how much you sell - the merit of your sales department, but the rights to the same software can be sold to different buyers with a difference of ± 20%
Do I need to put each new version of the created software on the balance?
A little trick, so as not to produce IA, if you are passionate about inventions or new versions: put the main version on the balance, and then write new versions and extensions later in the licensing sales contracts, separated by commas after the name of the main license.
What if new software is not for sale?
Sorry and hope. There are no additional taxes in this case.
Do I need to issue legal documents of ownership?
This has nothing to do with putting the software on the balance; it is a question of registering the rights to the product you created, and not the ability to sell it. Registration of rights lasts from 2 to 12 months, at the end you receive a certificate in your hands, which says: this is your software and you are its copyright holder.
Where to write off the cost of technical support for new software?
Technical support does not apply to software development and is charged to costs according to Accounting Policy.
How much should software cost?
It is irrational to set aside millions of dollars for this out of turnover, the cost of future software depends on your appetites, revenues and pay profit, but, in my opinion, it will be reasonable to spend no more than 3% of annual revenue on this.
How much minimal software should be created?
If you have geniuses who have written a masterpiece overnight - let this software cost 100 rubles, there is no legal restrictive framework.
Take care of your geniuses!
If after this instruction you still have (or, on the contrary, any) questions, I’m happy to prompt you, write!
Source: https://habr.com/ru/post/293564/
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