When looking at the invoice for the Google Apps for Business there is a time period noted on the invoice, so I would assume this should be treated as a prepaid expense and amortized over the one year period. A colleague of mine says it should be written off over 3 years, the life for off the shelf software.
Should Google Apps for Business be capitalized or expensed in one year?
Answers
Google Apps for Business is a subscription piece of software with a monthly or annual fee. As such, I would treat as a prepaid expense and amortize over the contract life. It is not a fixed asset; you are renting access to the tool.
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And if the yearly subscription rate isn't material, just expense it.
Prepaid assets accounts should have thresholds just like any other capital account.
Even if it replaces software that had a value of three years, it should be over the shorter period of 1 year. At the end of one year, unless you renew, you do not have anything.
As a
Cheers,
Robert
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