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Accounting for IT labor cost for Implementation of New ERP System

Our company is currently implementing a new ERP system. We are currently tracking IT labor cost directly associated with the implementation in order to capitalize those cost at the conclusion of the project (in accordance with ASC 350-40-30). My question is, is it required that we capitalize these cost, or can we choose to write them off to expense as incurred. I have not been able to find any guidance on if that is even an option.
Any guidance here will be appreciated. Thank you.

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Are these extra-ordinary IT costs, or just general costs for these employees who are detailed to the ERP implementation?

Patrick Reich
Title: Senior Staff Accountant
Company: Exemplis Corporation
(Senior Staff Accountant, Exemplis Corporation) |

This is just there normal salary cost for these employees. They track their time between ERP related work and there general IT work.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

There is no constraint to EXPENSE said costs. Expensing these cost is more CONSERVATIVE (accounting principle of conservatism) than capitalizing them.

Having said that, and in relation to your second comment, this is more a management reporting (classification) issue as you would have expensed it anyways (they are normal cost or salaries). The first paragraph pertains to implementation costs outside your current/normal (to include outside contractors and existing employee overtime) manpower costs.

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