Can consulting fees be capitalized?

The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third-party developers working on these projects. Expenses related to the preliminary phase of the project and post-implementation activities are counted as expenses to the extent that they are incurred. For example, a farmer could buy 12 to 13 months of feed in November because he could get a good price, or a company could pay insurance premiums in advance for a year. For example, if you pay a commission to a broker to guarantee a long-term asset, the commission you pay to that broker becomes part of the asset; you capitalize that expense, rather than spending it in the current year.

This content is for general information purposes only and should not be used as a substitute for consultation with professional advisers. In this case, the exception occurs again if you have a recurring commission agreement with that broker and the commission cannot be assigned to specific assets; a recurring, non-allocable commission would generally be dispensable if the company purchases new assets on an ongoing basis and no part of the commission depends on the acquisition of specific assets.

Dylan Nemecek
Dylan Nemecek

Typical social media ninja. Professional pop culture nerd. Unapologetic bacon advocate. Proud pop culture guru. Incurable social media nerd.

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