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Computer software programs may be developed by a company, patented, and then sold to customers for use on their computers. Productivity software like Microsoft Office® is an example. The cost of acquiring and developing computer software programs is recorded as an intangible asset, even if it is stored on a physical device like a computer. However, computer software that is integral to machinery—for instance, software that is necessary to control a piece of production equipment—is included as the cost of the equipment and classified as PPE.
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