The software industry got new accounting rules.
The Financial Accounting Standards Board said it adopted the standards because it was concerned about the divergence of accounting practices within the fast-growing industry. The new rules will have financial implications for the firms, requiring them to begin capitalizing production costs at a certain point in the new-product development process. Some computer-software firms had treated the entire development cost as a research and development expense, a way of increasing cash flow. The issue is a controversial one within the industry, and its main trade association withheld comment until details are released this week.