When costs for software used internally by Stanford exceed $1 million, these costs are typically capitalized if they add future value to Stanford. Costs that do not provide additional value to Stanford are expensed.
Software Costs - Capitalize vs. Expense
For all software project costs exceeding $1 million, please download the Software Costs – Capitalize vs. Expense Form, fill it out and submit it along with the project charter, signed agreement and supporting documentation to Business Affairs Finance and Facilities for Systems Governance Group (SGG) projects and Capital Accounting for non-SGG projects.
Use the decision tree below to help determine whether the software costs should be capitalized or expensed.
- To understand key concepts included in the decision tree, refer to the Software Capitalization Concepts Glossary.
- For detailed instructions, refer to How-to: Determine Whether Computer Software Costs Should be Capitalized or Expensed.