5. Accounting for Software Costs

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

5. Accounting for Software Costs

The Company accounts for the costs of software within its products in accordance with ASC Topic 985-20 “Costs of Software to be Sold, Leased or Marketed”, under which certain software costs incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated lives of the related products. The Company determines technological feasibility to be established upon the internal release of a detailed program design as specified by Topic 985-20. Upon the general release of the product to customers, development costs for that product are amortized over periods not exceeding five years, based on current and future revenue of the product. Net capitalized software costs totaled $1,478 and $2,207 as of December 31, 2013 and 2012, respectively. For the years ended December 31, 2013 and 2012, the Company’s amortization expense for capitalized software was approximately $1,069 and $935, respectively.