Expand
The first stage of development described in ASC 350-40-25 is the preliminary project stage.

Definition from ASC Master Glossary

Preliminary Project Stage: When a computer software project is in the preliminary project stage, entities will likely do the following:

  1. Make strategic decisions to allocate resources between alternative projects at a given point in time. For example, should programmers develop a new payroll system or direct their efforts toward correcting existing problems in an operating payroll system?
  2. Determine the performance requirements (that is, what it is that they need the software to do) and systems requirements for the computer software project it has proposed to undertake.
  3. Invite vendors to perform demonstrations of how their software will fulfill an entity’s needs.
  4. Explore alternative means of achieving specified performance requirements. For example, should an entity make or buy the software? Should the software run on a mainframe or a client server system?
  5. Determine that the technology needed to achieve performance requirements exists.
  6. Select a vendor if an entity chooses to obtain software.
  7. Select a consultant to assist in the development or installation of the software.

The following activities are generally part of the preliminary project stage:
  • Conceptual formulation of ideas and alternatives
  • Evaluation of alternatives
  • Determination of existence of needed technology
  • Final selection of alternatives

These costs are generally incurred in the early stages of a project when the reporting entity is exploring its technological needs and exploring various alternatives.
Internal and external costs incurred during the preliminary project stage should be expensed as incurred.

PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

Expand Expand
Resize
Tools
Rcl
Add to favorites
Please ensure
that you select
Print Background (colors and images) when printing.
CONTINUE
PwC image modal

This content is copyright protected. It is for your own use only - do not redistribute. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license.

Warning 2

✕

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

Viewpoint allows you to save up to 25 favorites.

Consider removing one of your current favorites in order to to add a new one.

Go to favorites

Are you sure you would like to remove this page from your list?

Yes
You are already signed in on another browser or device.
Click Continue if you want to automatically close other logged in sessions and continue. If you want to manually check for other active logged in sessions first, please select Cancel to go back to the previous page.
Need some help? Contact us
signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide
✕

Hello and welcome to Viewpoint

Your go-to resource for timely and relevant accounting, auditing, reporting and business insights. Follow along as we demonstrate how to use the site

Before we start.

Choose your preferred language below.