5. CAPITALIZED SOFTWARE COSTS

Capitalized software costs and accumulated amortization at January 31, 2014 and January 31, 2013 were as follows:

	January 31, 2014			January 31, 2013
	(in thousands)
Capitalized software costs:
Acquired software technology (1)	$	3,577		$	3,741
Capitalized software development costs (1)		1,183			1,253
		4,760			4,994
Less accumulated amortization		(1,445	)		(814	)
Capitalized software costs, net	$	3,315		$	4,180

(1)	Acquired software technology and capitalized software development costs include the impact of foreign currency translation.

Acquired software technology costs relate to technology purchased from the Company’s fiscal 2013 acquisitions of DynaSys and CEBOS, as described in Note 3 “Business Combinations” within these Notes to Consolidated Financial Statements. In addition to the acquired software technology, the Company has capitalized costs related to translations and localizations of QAD Enterprise Applications.

It is the Company’s policy to write off capitalized software development costs once fully amortized. Accordingly, during fiscal 2014, approximately $0.5 million of costs and accumulated amortization was removed from the balance sheet.

Amortization of capitalized software costs for fiscal 2014, 2013 and 2012 was $1.2 million, $0.6 million and $0.5 million, respectively. Amortization of capitalized software costs is included in “Cost of license fees” in the accompanying Consolidated Statements of Income and Comprehensive Income.

The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of January 31, 2014:

Fiscal Years	(in thousands)
2015	$	1,118
2016		972
2017		798
2018		427
	$	3,315