SaaS
Capitalized External Contractor — Software Development
Capitalizing a development agency invoice for building a new product feature.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Capitalized Software (Intangible) | Asset (+) | 18,000.00 | - |
| Accounts Payable (Dev Agency) | Liability (+) | - | 18,000.00 |
💡 Accountant's Note
External development costs for qualifying projects are capitalized in the same way as internal labor. The work must be in the application development stage and the project must be technically feasible.
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