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

3 Months Ended

Jul. 31, 2017

Notes to Financial Statements

Internal Use Software Disclosure [Text Block]

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 did

not

incur and did

not

capitalize expenditures related to the development of software for internal use during the

three

months ended

July 31, 2017.

The Company capitalized

$266,000

related to the development of software for internal use during the

three

months ended

July 31, 2016.

Capitalized software included

$155,000

of internal costs to develop software and

$111,000

of

third

party programmers' costs during the

three

months ended

July 31, 2016.

Such costs were capitalized and amortized over the expected useful life of the asset which is

3

to

5

years. Total amortization expenses during the

three

months ended

July 31, 2017

and

July 31, 2016,

were

$165,000

and

$1,368,000,

respectively. Amortization expense in fiscal

2017

was primarily attributable to additional amortization of internally developed software costs related to the product production cycle that is expected to be upgraded during fiscal

2018.