Accounting for the Costs of Computer Software Developed for Internal Use

9 Months Ended

Jan. 31, 2013

Internal Use Software [Abstract]

Accounting for the Costs of Computer Software Developed for Internal Use:

Note 10 - Accounting for the Costs of Computer Software Developed for Internal Use:

The Company has adopted the provisions of the Statement of Position 98-1 (SOP 98-1), “Accounting for the Costs of Computer Software Developed for Internal Use”.  SOP 98-1 requires companies to capitalize as long-lived assets many of the costs associated with developing or obtaining software for internal use and amortize those costs over the software’s estimated useful life in a systematic and rational manner.

The Company capitalized  $1,546,000 and $2,992,000 related to the development of software for internal use for the nine months ended January 31, 2013 and January 31, 2012, respectively, of which $1,444,000 and $1,876,000 related to development costs for  the digital production software  project and $102,000 and $1,116,000 related to a new fulfillment system, respectively.  Such costs are capitalized and amortized over the expected useful life of the asset which is approximately from 3 to 5 years.  Total amortization expenses for the nine months ended January 31, 2013 and January 31, 2012 were $937,000 and $191,000, respectively.

The new fulfillment system was placed in service on December 1, 2011.  The Company’s refreshed website, Single Sign On (“SSO”) and new e-commerce and website shopping cart were also placed in service during December 2011.  A new institutional sales website ValueLinePro.com was launched by the Company during March 2012.