Note 5 - Capitalized Software Costs

9 Months Ended

Oct. 31, 2020

Notes to Financial Statements

Capitalized Software Costs [Text Block]

5. CAPITALIZED SOFTWARE COSTS

Capitalized software costs and accumulated amortization at October 31, 2020 and January 31, 2020 were as follows:

	October 31, 2020			January 31, 2020
	(in thousands)
Capitalized software costs:
Capitalized software development costs	$	3,618		$	3,356
Acquired software technology		135			135
		3,753			3,491
Less accumulated amortization		(1,624	)		(1,569	)
Capitalized software costs, net	$	2,129		$	1,922

The Company’s capitalized software development costs relate to translations and localizations of QAD Adaptive Applications. Acquired software technology costs relate to intellectual property purchased during fiscal 2019.

It is the Company’s policy to write off capitalized software development costs once fully amortized. Accordingly, during the first nine months of fiscal 2021, approximately $0.8 million of costs and accumulated amortization were removed from the Condensed Consolidated Balance Sheet, related to capitalized software development costs which were fully amortized during the first nine months of fiscal 2021.

Amortization of capitalized software costs was $0.3 million and $0.9 million for the three and nine months ended October 31, 2020, respectively; compared to $0.2 million and $0.7 million for the three and nine months ended October 31, 2019, respectively. Amortization of capitalized software costs is included in “Cost of license” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of October 31, 2020:

Fiscal Years	(in thousands)
2021 remaining	$	298
2022		1,000
2023		636
2024		195
Thereafter		-
	$	2,129