Accounting for the Costs of Computer Software Developed for Internal Use

6 Months Ended

Oct. 31, 2013

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 $1,230,000 and $839,000 related to the development of software for internal use for the six months ended October 31, 2013 and October 31, 2012, respectively, of which $1,191,000 and $758,000 are related to development costs for the digital production software project and $39,000 and $81,000 are related to a new fulfillment system, respectively. Such costs are capitalized and amortized over the expected useful life of the asset which is approximately 3 to 5 years. Total amortization expenses for the six months ended October 31, 2013 and October 31, 2012 were $839,000 and $617,000, respectively.