Fasb Research

1. ASC 985-330-25-1:

The costs incurred for duplicating the computer software, documentation, and training materials from the product masters and for physically packaging the product for distribution shall be capitalized as inventory on a unit-specific basis.

ASC 985-330-40-1:

The costs incurred for duplicating the computer software, documentation, and training materials from the product masters and for physically packaging the product for distribution shall be charged to cost of sales when revenue from the sale of those units is recognized.

The new product will be recorded as inventory on unit-specific basis for the seller and recorded as cost of sales for the buyer.

2. ASC 605-45-45-19:

Many sellers charge customers for shipping and handling in amounts that exceed the related costs incurred. The components of shipping and handling costs, and the determination of the amounts billed to customers for shipping and handling, may differ from entity to entity. Some entities define shipping costs and handling costs as only those costs incurred for a third-party shipper to transport products to the customer. Other entities include as shipping and handling costs a portion of internal costs, for example, salaries and overhead related to the activities to prepare goods for shipment. In addition, some entities charge customers only for amounts that are a direct reimbursement for shipping and, if discernible, direct incremental handling costs; however, many other entities charge customers for shipping and handling in amounts that are not a direct pass-through of costs.

These costs can be reported as expenses derived from third party shippers or internal costs.

3. ASC 210-10-45-13:

Asset valuation allowances for losses such as those on receivables and investments shall be deducted from the assets or groups of assets to which the allowances relate. See paragraph 310-10-50-14 for a related disclosure requirement.

ASC 310-10-35-8:

a. Information available before the financial statements are issued or are available to be issued (as discussed in Section 855-10-25) indicates that it is probable that an asset has been impaired at the date of the financial statements.

b. The amount of the loss can be reasonably estimated.

ASC 310-10-35-9:

Losses from uncollectible receivables shall be accrued when both of the preceding conditions are met. Those conditions may be considered in relation to individual receivables or in relation to groups of similar types of receivables. If the conditions are met, accrual shall be made even though the particular receivables that are uncollectible may not be identifiable.